MinebeaMitsumi Inc. · TSE:6479
MinebeaMitsumi — FY2024 Earnings Presentation
58 slides from MinebeaMitsumi's earnings presentation, May 10, 2024
Slide 1: Business Results, Fiscal Year Ended March 31, 2024
MinebeaMitsumi Passion to Create Value through Difference Business Results Fiscal Year Ended March 31, 2024 MinebeaMitsumi Inc. May 10, 2024
Slide 2: Today's Agenda
Today’s Agenda 1. Financial Results 2. Management Policy & Business Strategy May 10, 2024 2 MinebeaMitsumi
Slide 3: Introduction of Financial Results
My name is Yoshida. Today I would first like to explain the consolidated financial results for the fiscal year ended March 31, 2024. 3
Slide 4: FY3/24 Consolidated Results
Consolidated net sales for the fiscal year ended March 31, 2024 totaled 1,402,127 million yen while operating income reached 73,536 million yen and profit for the period attributable to owners of the parent hit 54,035 million yen. These figures represent year on year increase of 8.5%, decrease of 24
Slide 5: Fourth Quarter Consolidated Results
Consolidated net sales for the fourth quarter of the fiscal year ended March 31, 2024, was up 2.7% year on year and down 8.5% quarter on quarter to total 348,803 million yen. Operating income down 35.3% year on year and down 17.7% quarter on quarter to total 20,342 million yen. Profit for the period
Slide 6: Annual Trend in Sales, Operating Income and Margin
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 ended Mach 31, 2024 was 5.2%, down 2.3 percent
Slide 7: Quarterly Trend in Sales, Operating Income and Margin
This is for quarterly trend in net sales, operating income and operating margin. The operating margin for the fourth quarter was 5.8%, down 3.5 percentage points year on year and down 0.7 percentage points quarter on quarter. 7
Slide 8: Q4 Forecast vs Actual by Segment
Here 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. Net sales of PT exceeded the forecast due to steady sales for automotive and aircraft applications, despite the slow recovery of the data ce
Slide 9: Precision Technologies Annual Results
Now let’s take a look at the results by segment, starting with Precision Technologies 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 a line chart for operating margins. From the fourth
Slide 10: Precision Technologies Quarterly Trends
This slide shows the quarterly trends. Fourth quarter net sales increased 7.7% quarter on quarter to total 58.1 billion yen. Sales of ball bearings increased 2.9% quarter on quarter to total 39.2 billion yen. The monthly external shipment volume was down 4.1% quarter on quarter for an average of 210
Slide 11: Motor, Lighting & Sensing Annual Results
Now let’s look at Motor, Lighting & Sensing segment. Net sales increased 0.8% quarter on quarter to total 369.4 billion yen. Looking at the results by product, we see that sales of motors increased 2.7% quarter on quarter to reach 280.2 billion yen. This is mainly due to solid sales, particularly of
Slide 12: Motor, Lighting & Sensing Quarterly Trends
This slide shows the quarterly trends. Net sales increased 5.6% quarter on quarter to total 97.0 billion yen. Looking at the results by product, we see that sales of motors increased 8.1% quarter on quarter to reach 75.2 billion yen. This was mainly due to strong sales of motors for automotive appli
Slide 13: Semiconductors & Electronics Annual Results
Let’s look at the performance for Semiconductors & Electronics segment. Net sales decreased 6.7% year on year to total 494.7 billion yen in the fiscal year ended March 31, 2024. This is due to lower sales in semiconductors and mechanical components, despite higher sales in optical devices. Operating
Slide 14: Semiconductors & Electronics Quarterly Trends
This slide shows the quarterly trends. Net sales decreased 25.3% quarter on quarter to total 109.5 billion yen. This was due to decreased revenues accompanied by seasonality of optical devices and mechanical components, etc. Operating income totaled 9.5 billion yen while the operating margin was 8.7
Slide 15: Access Solutions Annual Results
Finally, let's look at Access Solutions segment. Net sales increased 65.4% year on year to total 322.1 billion yen in the fiscal year ended March 31, 2024. This is due to a recovery in sales to the automotive industry and automotive devices in addition to the performance of Minebea AccessSolutions,
Slide 16: Access Solutions Quarterly Trends
This slide shows the quarterly trends. Net sales decreased 5.5% quarter on quarter to total 83.0 billion yen. This was mainly due to temporary adjustments in automobile production in China, Japan, and other countries. Operating income came to 2.3 billion yen, and the operating margin was 2.7%. Opera
Slide 17: Annual Profit and EPS
The bar graph here shows trends in profit attributable to owners of the parent while the line graph chart changes in the profit for the period per share. The profit for the period was 54.0 billion yen. Earnings for the period per share was 133.1 yen. 17
Slide 18: Quarterly Profit and EPS
The bar graph here shows trends in profit attributable to owners of the parent while the line graph chart changes in the profit for the period per share. The profit for the period was 18.3 billion yen. Earnings per share was 45.3 yen. 18
Slide 19: Quarterly Inventory Trend
Next we have the quarterly inventory trend. At the end of the fourth quarter, inventory totaled 294.9 billion yen, which is 5.6 billion yen less than what it was three months ago. 19
Slide 20: Net Interest-Bearing Debt and Free Cash Flow
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 fourth quarter, net interest-bearing debt, totaling 208.6 billion yen, was up 6.9 billion
Slide 21: FY3/25 Forecast Summary
This is a summary of the forecast for the fiscal year ending March 31, 2025. This fiscal year, we expect to reach a new record high in both sales and operating income. Net sales are expected to increase in each segment to 1,500 billion yen due to improved inventory levels in the end markets. Similar
Slide 22: FY3/25 Forecast by Segment
This slide shows the forecast by business segment. This is all for my presentation. 22
Slide 23: Management Policy and Business Strategy
Hello, I’m Yoshihisa Kainuma. I will now explain our management policy and business strategy. 23
Slide 24: Inventory digestion completed and recovery of high value-added products
First, on a brighter note, inventory digestion has been completed in various sectors since January 2024, and the recovery of high value-added products has begun to boost the profit. In the past, we have focused on the point where the numbers dropped, for example, data centers were bad, fan motors we
Slide 25: Operating income target of 100 billion yen
We have set our operating income target at 100 billion yen for the fiscal year ending March 31, 2025. Actually, we were not sure whether to set it at 103 billion yen or 105 billion yen until the very end, and we hope that you will take the 100 billion yen as a conservative image. The exchange rate i
Slide 26: FY3/25 operating income image by segment
In this table, the image of operating income for the fiscal year ending March 31, 2025, assuming market recovery, presented at the 2Q investor meeting for the fiscal year ended March 31, 2024 of 77 billion yen operating income target is shown in brackets. In addition, the bold figure represents a se
Slide 27: Record sales and 2.5 trillion yen target
Thanks to your support, net sales have reached a record high for 11 consecutive fiscal years, and we believe that our target of 2.5 trillion yen for the fiscal year ending March 31, 2029 is almost on- track. Although we have revised our medium-term business plan quite conservatively, we expect to ac
Slide 28: Mid-term Business Plan
Mid-term Business Plan Review medium-term business plan based on current market = BB sates =O Real operating margin* - = Bop ~O> operating margin BB Add-on by M&A (image) (billions of yen) = 1,402 6.2% ---° i a po-ooo2-- 15.2% D9 - "74 — -~ FY3/24 FY3/25 FY3/26 FY3/27 Plan Plan Plan “Real operating
Slide 29: Precision Technologies (PT) Targets
Precision Technologies (PT) Targets MinebeaMitsumi Passion to Create Voive through Growth of ball bearings through optimization of customer inventory levels of high value-added products and market recovery Recovery + growth in aircraft market, plus steady takeoff of new business Key points Ball bear
Slide 30: Impact of liquid cooling on fan motors
Please refer to page 54 of the presentation on the reference section that summarizes our view of the impact of liquid cooling on fan motors. Comparing the increase in fan motors and spindle motors for data centers, they look about the same. Our view is that they have bottomed out and will be coming
Slide 31: Acquisition of ball screw business from TSUBAKI NAKASHIMA
We have announced that we will acquire ball screws and other businesses from TSUBAKI NAKASHIMA by December 2024. In preparation for the coming age of robotics, ball screws and ball ways are the parts that integrate with our motors, grippers, connectors, semiconductors, etc. My challenge up to now ha
Slide 32: Motor, Lighting & Sensing (MLS) Targets
Motor, Lighting & Sensing (MLS) Targets MinebeaMitsumi Passion to Create Voive through Top-line growth centered on motors Operating income of motors to 25 billion yen Key points Bi Hotor sates Ill sensing sevice sates Electronic gece sles Il omer sates (Billions of yen) Motors Growing revenues throu
Slide 33: Growth factors for motors
As this chart shows, we believe that the growth factor for motors is that we are entering a variety of fields for motors that did not exist 10 years ago. We have already received offers and orders for HVAC actuators, and we expect to capture more than approximately 60% of the market share. We have a
Slide 34: Semiconductors & Electronics (SE) Targets
Semiconductors & Electronics (SE) Targets Mineboohskeum! Targeting further growth to operating margin 10% or more soe Operatingincone D> overtngmargn Key points (Billions of yen) 630.0 Analog semiconductors Further expansion of analog semiconductor business through business integration with Minebea
Slide 35: Integration with Minebea Power Semiconductor Devices
The integration with Minebea Power Semiconductor Devices (MPSD, renamed from Hitachi Power Semiconductor Device) will enable us to acquire modular technology and back-end process technology, and so on. However, the biggest “Difference” that we gain is the special side-gate IGBT technology that enabl
Slide 36: Growth Potential of Power Semiconductor Business (2)
Growth Potential of Power Semiconductor Business (2) Aiming for 200 billion yen in net sales and 30% OP in FY3/29 Analog semiconductors re-numbered to the second spear Medium-Term Targets for Analog Semiconductor Div. MinebeaMitsumi 8 spears strategy 30% @ Bearings Po (billions of yen) 200 = 120 - 4
Slide 37: Access Solutions (AS) Targets
Access Solutions (AS) Targets Ringnesheks uml Continued improvement in profitability due to market recovery and integration effects Aiming for 10% OPM by launching INTEGRATION and high value-added products in the market i Mi sates Operating income Operating margin Key points oO (Billions of yen) 355
Slide 38: New INTEGRATION products (1)
Create value and introduce new INTEGRATION products through aggressive activities (1) MinebeaMitsumi Creating new value and products by integrating diverse products 8 core businesses [8 spears] eee gy RES we ly e High speed fan motors oO — Actuator for LIDAR —— \ uum @ © © ® Solution Smart actuator
Slide 39: New INTEGRATION products (2)
Create value and introduce new INTEGRATION products through aggressive activities (2) MinebeaMitsumi Creating new value and products by integrating diverse products 8 core businesses [8 spears) High power- power supply module ee e@ @ @ e @ @ High efficiency & S (o) e @ pressure motors 4 Highs relate
Slide 40: New Plant (Second Plant in Cambodia) to be Established
New Plant (Second Plant in Cambodia) to be Established MinebeaMitsumi Passion to Create Value through Difference Secured land to build a new plant in Pursat Province, Cambodia for business expansion Judged to be advantageous to enter the area as renewable energy can be utilized 1. Place: Krakor Dist
Slide 41: Carbon neutrality and renewable energy investment
We are seriously committed to carbon neutrality in order to fulfill our social responsibility as a public entity of society. We are building a large-scale power generation facility in Pursat, Cambodia, at a cost of approximately 6 billion yen. We are also working on a fairly extensive power generati
Slide 42: Dividends
Dividends MinebeaMitsumi sate Valve through Difference FY3/24 FY3/25 Plan May 10, 2024 Year-end 20 yen/share Annual 40 yen/share The annual dividend is targeted around 20% of consolidated payout ratio in principle, maintaining a sustainable and stable dividend in total consideration of business envi
Slide 43: Forward-looking statements notice
May 10, 2024 MinebeaMitsumi Passion to Create Value through Difference Any statements in this presentation which are not historical are future projections based on certain assumptions and executive judgments drawn from currently available information Please note that actual performance may vary sign
Slide 44: Reference
Reference 44
Slide 45: (1) History of years
(1) History of 15 years 45
Slide 46: 15-year summary introduction
Thank you very much for your guidance, I have successfully fulfilled my responsibilities at this company for 15 years as of March 31, 2024. Here is a brief summary of my 15-year journey, which I hope you will find useful. (Please go to page 49) 46
Slide 47: Trends of Sales
MinebeaMitsumi Trends of Sales MinebeaMitsuml Sales CAGR (FY3/09-FY3/24) i% = . 1 2% 1807 m™ Actual/ Forecast 1st year of mid-term Business Plan © 3rd year of mid-term Business Plan FY3/09 FY3/10 FY3/11 FY3/12 FY3/13 FY3/14 FY3/15 FY3/16 FY3/17 FY3/18 FY3/19 FY3/20 FY3/21 FY3/22 FY3/23 FY3/24 FY3/25
Slide 48: Trends of Operating Income
. MinebeaMitsumi Trends of Operating Income Eb egy Operating income CAGR (FY3/09-FY3/24) 12> ; m™ Actual/ Forecast 1st year of mid-term Business Plan © 3rd year of mid-term Business Plan 13.4 We = _ FY3/09 FY3/10 FY3/11 = FY3/13 FY3/14 FY3/15 FY3/16 FY3/17 FY3/18 FY3/19 FY3/20 FY3/21 FY3/22 FY3/23 F
Slide 49: Review of M&As
Looking back at the M&As for the first time, the total sales of the target companies at the time of the business integration amounted to approximately 610 billion yen. When combined with our original 200 billion yen, the total is 800 billion yen, and we believe that the remainder comes from organic
Slide 50: EBITDA/Net Interest-bearing Debts/Free Cash Flows
EBITDA/Net Interest-bearing Debts/Free Cash Flows Minebooktnsuml Cash-generating capabilities backed by high profitability Trends in EBITDA/Net interest-bearing debts/Free cash flows (billions of yen) ea mun EBITDA —©- Net interest-bearing debts i Free cash flows O | FY3/10 FY3/11 FY3/12 FY3/13 FY3/
Slide 51: EPS Growth Rate and ROE
EPS Growth Rate and ROE EPS:FY3/09-FY3/24 actual CAGR15.1%, aim for CAGR15% or more toward FY3/29 ROE:FY3/09-FY3/24 average actual 11.3%, aim for 15% or more toward FY3/29 (yen)| —@- MinebeaMitsumi EPS —®— MinebeaMitsumi EPS (Moving average of past 10 years’) @m MinebeaMitsumi ROE ~~ TSE PRIME Marke
Slide 52: Stock price performance over 15 years
Thanks to your support, we believe that our stock price has performed very well over the past 15 years. That concludes my presentation. Thank you very much. 52
Slide 53: (2) Impact of Differences in Cooling Systems for Data Centers on Us
(2) Impact of Differences in Cooling Systems for Data Centers on Us 53
Slide 54: Impact of Differences in Cooling Systems for Data Centers on Us
Impact of Differences in Cooling Systems for Data Centers on Us Mine?: = Even if there is a change in the cooling system of the server, the fan motors continue to be used = On the contrary, there are also methods that increase the number of fan motors used | Data expansion is expected to continue in
Slide 55: (3) Financial Data
(3) Financial Data 55
Slide 56: S.G.&A. Expense / Ratio
S.G.&A. Expense / Ratio (Billions of yen) { |= S.G.&A. expenses =CE= S.G.&A. to sales ratio ] 41.6 42.7 May 10, 2024 56 MinebeaMitsumi Passion to Create Value through 56
Slide 57: Capital Expenditure / D&A Expense
Capital Expenditure / D&A Expense (Billions of yen) [ ™= Capital expenditure ™™® Depreciation & Amortization expenses | 147.0 FY3/21 FY3/22 FY3/23 FY3/24 FY3/25 Forecast * Capital expenditures of FY3/22 & FY3/23 include new HQ building acquisition expenses “D&A expense prior to 3Q FY3/24 has been re
Slide 58: ROIC (Return On Invested Capital)
ROIC (Return On Invested Capital) MinebeaMitsumi NOPAT (operating income + extraordinary profitloss) x (1-tax rate) i (Notes receivable/accounts receivable + inventories ROIC Invested capital +non-current assets - notes payable/accounts payable) Calculated using business assets (trade receivable/pay