MinebeaMitsumi Inc. · TSE:6479
MinebeaMitsumi — Minebea — FY2015 Earnings Presentation
48 slides from MinebeaMitsumi's earnings presentation, May 8, 2015
Slide 1: Business Result, Fiscal Year Ended March 2015
Minebea Passion to Exceed Precision Business Result Fiscal Year Ended March: May 8, 2015 Minebea Co., Ltd.
Slide 2: Financial Results; Policy and Strategy
May 8, 2015 Minebea Passion to Exceed Precision 1. Financial Results 2. Policy and Strategy
Slide 3: Financial Results
May 8, 2015 Minebea Passion to Exceed Precision Financial Results Hiromi Yoda Managing Executive Officer
Slide 4: Fiscal year results: record sales and profits
Net sales for the fiscal year ended March 31, 2015 increased by 34.8% from the previous fiscal year to total 500,676 million yen. Operating income was 60,101 million yen, which is 86.7% higher than it was last year. Net income was 39,887 million yen, up 91.0% from last year. Net sales, operating inc
Slide 5: Fourth quarter results
For the fourth quarter of the fiscal year ended March 31, 2015, net sales totaled 138,715 million yen, up 48.2% from the same period last year, but down 4.6% over the previous quarter. Operating income was 16,259 million yen for an increase of 83.0% from the same period last year, but down 14.8% fro
Slide 6: Net sales
In the fiscal year ended March 31, 2015, net sales were up 34.8% year on year to total 500.7 billion yen. This is a new record high, surpassing the previous fiscal year’s total. We expect sales for the fiscal year ending March 2016 to hit 650 billion yen due mainly to a significant sale increase in
Slide 7: Operating income
Operating income for the fiscal year ended March 31, 2015 totaled 60.1 billion yen, up 86.7% over last year while the operating margin rose 3.3 percentage points to hit 12.0%. Operating income for the fiscal year ending March 2016 is projected to increase to 67.0 billion yen as sales of electronic d
Slide 8: Machined components annual results
These graphs show annual net sales and operating income for the machined components business segment. Net sales for the fiscal year ended March 31, 2015 totaled 155.0 billion yen, up 10.7% from the previous fiscal year. Operating income increased 18.4% to reach 39.7 billion yen pushing the operating
Slide 9: Machined components quarterly results
These graphs show quarterly net sales and operating income for the machined components business segment. Fourth quarter net sales for the segment were up 4.4% from the previous quarter to total 41.5 billion yen. Operating income increased by 2.2% to reach 10.3 billion yen, and the operating margin d
Slide 10: Electronic devices and components annual results
In the electronic devices and components business segment, net sales for the fiscal year ended March 31, 2015 totaled 343.8 billion yen. That’s up 49.2% from the previous fiscal year due to another year of skyrocketing LED backlight sales, which account for the majority of electronic devices sold. O
Slide 11: Electronic devices and components quarterly results
These graphs show quarterly net sales and operating income for the electronic devices and components business segment. Due to the seasonal downswing, the segment’s fourth quarter net sales fell 8.0% below the figure for the previous quarter, to hit 96.6 billion yen. Although better than anticipated,
Slide 12: Net income
Net income for the fiscal year ended March 31, 2015 jumped to 39.9 billion yen, which is up 91.0% from the last fiscal year, as operating income increased. Net income per share was 106.7 yen. Extraordinary losses totaled 8.7 billion yen, including 3.1 billion yen due to changes in our U.S. subsidiar
Slide 13: SG&A expenses
SG&A expenses for the quarter increased by 0.5 billion yen quarter on quarter, mostly from a foreign exchange gain of 0.4 billion yen, to total 15.9 billion yen. The SG&A expenses-to- sales ratio increased 0.9 percentage points to 11.5% as sales dropped. 12
Slide 14: Inventories
Inventories as of March 31, 2015 were up 2.6 billion yen quarter on quarter to total 92.2 billion yen. 13
Slide 15: Capital expenditures and depreciation
As sales increased, we increased capital expenditures for the fiscal year to total 37.6 billion yen. Depreciation and amortization expenses for the period totaled 28.8 billion yen and will be higher for the fiscal year ending March 2016 since we have expanded our production capacity, mainly for LED
Slide 16: Net interest-bearing debt and free cash flow
This graph shows net interest-bearing debt, which is total interest-bearing debt minus cash and cash equivalents, and net debt to equity ratio for each fiscal year. Net interest-bearing debt fell by a whopping 16.8 billion yen to total 93.1 billion yen at the end of the fiscal year. Free cash flow f
Slide 17: Forecast for fiscal year ending March 2016
This is a summary of our forecast for the fiscal year ending March 2016. We expect sales and profits will continue to grow for the fourth year in a row to set another record high. This increase will come from a 100 billion yen-size big jump up in electronic devices sales due to an expansion of smart
Slide 18: Forecast by business segment
This slide shows the forecast by the business segment. 17
Slide 19: Policy and Strategy
Now let’s review policy and strategy. 18
Slide 20: Table of contents
Table of contents Minet @ FY3/2015 results m@ New mid- to long-term targets m@ Mid-term Business Plan @ FY3/2016 plan May 8, 2015 19 19
Slide 21: Review of the past year
Taking a brief look back over the past year, we see that we were able to earn 500 billion yen in sales and had an operating income of 60 billion yen. That would have been a dream for us not too long ago. 20
Slide 22: Performance drivers and ball bearing demand
There are a number of factors that drove performance up. For one thing, our machined components business, which includes ball bearings, was booming. External sales of ball bearings hit a record high 155 million units in March just before the fiscal year ended. Then sales exceeded 150 million units j
Slide 23: Five Arrows strategy progress
In November 2013, we announced our Five Arrows strategy. Two of those Five Arrows, ball bearings and measuring components, are very close to hitting the mark. We set the target for measuring components at 20 billion yen when they were initially generating 12-13 billion yen in sales. Since acquiring
Slide 24: Table of contents: new mid- to long-term targets
Minebea Passion to Exceed Precision M@ FY3/2015 results —@ New mid- to long-term targets m@ Mid-term Business Plan @ FY3/2016 plan May 8, 2015 23 23
Slide 25: New mid- to long-term target: 1 and/or 100
Before moving on to explaining our mid-term business plan, I'd like to show you our new mid- to long-term target. We are shooting for one trillion yen in sales or 100 billion yen in operating income, whichever comes first. That doesn't mean we have to achieve both the one trillion yen and 100 billio
Slide 26: Three key areas of the mid-term plan
These are three key areas in both our mid-term business plan and the "1 and/or 100" target for 2020. Since I became president, I have repeatedly emphasized that Minebea’s extensive technological capabilities make us one of kind. At first we were more of a collection of small companies with each divi
Slide 27: C to G project
In carrying out the C to G project, which I talked about earlier, I try to underscore the same point across the organization. That is, we should maximize our vertical and horizontal strengths to come up with various new solutions and bring them to market. 26
Slide 28: Five Arrows for new products
That's why I made the internal announcement about our Five Arrows for new products. Although I cannot tell you everything about these products due to confidentiality agreements, I'll explain as much as possible. The Wavy Nozzle is our original product employing an array of Minebea technologies. It r
Slide 29: Wireless network system from Paradox Engineering
We have a few Swiss employees from Paradox Engineering, a wireless technology company, working in this office. I honestly believe that its wireless network system is currently the most advanced in the world. It's an extremely innovative network system. Employing a single gateway, it integrates a low
Slide 30: Cambodia CO2 reduction project
About a year and a half ago, we launched a research project in Cambodia with funding from Japan's Ministry of Economy, Trade and Industry and have just completed a feasibility study for reducing CO2 emissions in that country. Our wireless networking technology, which I just described, can do everyth
Slide 31: New products: LED lights and smart street lights
Here are some of our new products. We are currently working on 15-20 projects at the same time. I won't go into all of them today, but I'll give you a brief overview of some of these products. Our LED lights for tunnels have been commercialized and are now being put to use in tunnels in various loca
Slide 32: Bolt tightness sensor and industrial sensors
The next is a sensor for monitoring the tightness of bolts using a pressure sensor employed in measuring components. Big tunnels, for example, have large fans that are fixed to the ceiling using bolts. If the bolts are loose, they will fall. We are focusing on developing sensors that will send an al
Slide 33: Bolt tightness sensor and industrial sensors
The next is a sensor for monitoring the tightness of bolts using a pressure sensor employed in measuring components. Big tunnels, for example, have large fans that are fixed to the ceiling using bolts. If the bolts are loose, they will fall. We are focusing on developing sensors that will send an al
Slide 34: Mid-term business plan
Here's a look at our mid-term business plan. Recently a newspaper report was released about our plan to begin assembling smartphones. At this moment we don't have any plans to assemble smartphone parts into finished products or LCD modules. As I've already told you on several occasions, as smartphon
Slide 35: Machined components plan and ball bearing outlook
If you look further into our business plan for this fiscal year, in the machined components business segment you can see that we expect to sell 160 million ball bearing units externally in June. When we announced our Five Arrows strategy in November 2013, 130 million units was the most we could sell
Slide 36: Smartphone market and LED backlight demand
Everybody seems to have different opinions about where the smartphone market headed. One thing for certain is that there are dark clouds hanging over at least some market segments. Although the market for entry models is stagnating, demand is still booming for the coveted high-end models, and that g
Slide 37: Automotive needs for new products
Needs for new types of products arise as cars become more sophisticated. 36
Slide 38: Automotive ball bearing applications
These include exhaust gas recirculation systems, lighting systems, and turbo chargers. Environmental protection, safety, energy efficiency, and comfort are the most common needs. One European luxury model uses 42 Minebea-size ball bearings per vehicle. Judging from the fact that 38 of them are actua
Slide 39: Rod-end bearing business
To be honest, I always feel frustrated when it comes to the rod-end bearing business. Even though it's our most global business, we face a great many internal barriers. That's my biggest dilemma. There's still plenty of demand to tap into. Most of our competitors are American companies. When it come
Slide 40: Revised Five Arrows strategy
We have revised our Five Arrow strategy. Our goal under the newly revised strategy is to sell 180 million ball bearings externally by increasing monthly average sales by 10 million units a year. This target is set for the fiscal year ending March 2018. Once we attain this target, our new plant in Th
Slide 41: Table of contents: FY3/2016 plan
jane M@ FY3/2015 results m@ New mid- to long-term targets m@ Mid-term Business Plan @ FY3/2016 plan May 8 2015 40 40
Slide 42: FY3/2016 sales and operating income plan
This fiscal year we expect sales to total 650 billion yen and operating income 67 billion yen. These projections were made in light of expanding operations due partly to our smartphone- related assembly business, growth of our existing businesses, the synergy created from the acquisition of Sartoriu
Slide 43: To-do list for this fiscal year
Here's our to-do list for this year. I've already talked about ball bearings, expanding our smartphone-related assembly business, and increasing LED backlight volumes. Profits from motors and measuring components are expected to improve. J3DD has finally reached a point where it can ship quality sam
Slide 44: Net interest-bearing debt outlook
Since cash flow will increase as our performance improves, net interest-bearing debt is expected to drop to around 70 billion yen this fiscal year barring any major M&As. 43
Slide 45: Shareholder returns
Finally, I'd like to turn to the subject of shareholder returns. The big story in the stock market today is about all those companies that are increasing their dividends. Every company is different. If it has surplus cash, no debt, operates a single business to grow, it's okay to increase the divide
Slide 46: Payout ratio target of about 20%
We haven't yet finalized the dividends for this fiscal year. The slide says, "Aiming for about 20% payout ratio for FY3/16." If you notice, it doesn't say a "20% payout ratio." By "about 20%" I mean equal or more than 17.5% but less than 22.5%. This is just a ballpark figure we are aiming for. If we
Slide 47: Net income per share target
Here is the last slide. This fiscal year we are aiming to increase net income per share by 20% or more, and that's my message to you. That concludes my presentation. 46
Slide 48: Minebea Co., Ltd. Business Results
Minebea Co., Ltd. Business Results http://www.minebea.co.jp/ 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 significantly