MinebeaMitsumi Passion to Create Value through Difference Business Results Fiscal Year Ended March 31, 2017 MinebeaMitsumi Inc. May 9, 2017 |
Contents 1. Financial Results 2. Policy and Strategy May 9, 2017 2 MinebeaMitsumi Passion to Create Value through Difference |
Financial Results Hiromi Yoda Director, Senior Managing Executive Officer May 9, 2017 3 MinebeaMitsumi Passion to Create Value through Difference |
Summary of Consolidated Business Results Net sales and net income hit record highs Millions of yen) FY3/16 Full Year FY3/17 Full Year Change YoY FY3/17 February Forecast Full Year VS. Forecast Net sales 609,814 638,926 +4.8% 630,000 101.4% Operating income 51,438 49,015 -4.7% 48,000 102.1% Ordinary income 46,661 48,393 +3.7% 47,000 103.0% Income attributable to owners of the parent 36,386 41,146 +13.1% 38,000 108.3% Net income per share (yen) 97.26 107.66 +10.4% 99.12 108.3% Foreign exchange rates FY3/16 Full Year FY3/17 Full Year US$ (Yen)120.78 (Yen)108.76 Euro (Yen)132.75 (Yen)119.34 Thai Baht (Yen)3.46 (Yen)3.09 Chinese RMB (Yen)19.03 (Yen)16.18 May 9, 2017 4 MinebeaMitsumi Passion to Create Value through Difference |
Summary of Consolidated Business Results for 4Q MITSUMI consolidation boosts sales and profits (Millions of yen) FY3/16 4Q FY3/17 3Q 4Q Change YoY QoQ Net sales 135,599 167,375 196,418 +44.9% +17.4% Operating income 8,536 16,120 14,300 +67.5% -11.3% Ordinary income 8,215 15,857 13,621 +65.8% -14.1% Income attributable to owners of the parent 6,802 12,167 16,233 +138.7% +33.4% Net income per share (yen) 18.17 32.44 39.65 +118.2% +22.2% Foreign exchange rates FY3/16 4Q FY3/17 3Q FY3/17 4Q US$ (Yen)118.37 (Yen)106.13 (Yen)114.29 Euro (Yen)129.35 (Yen)116.04 (Yen)121.14 Thai Baht (Yen)3.30 (Yen)3.02 (Yen)3.24 Chinese RMB (Yen)18.06 (Yen)15.62 (Yen)16.54 May 9, 2017 5 MinebeaMitsumi Passion to Create Value through Difference |
Net Sales Yearly Net sales hit record high (Billions of yen) 228.4 269.1 251.4 282.4 371.5 500.7 609.8 638.9 750.0 Mar.'10 Mar.'11 Mar.'12 Mar.'13 Mar.'14 Mar.'15 Mar.'16 Mar.'17 Mar.'18E May 9, 2017 6 MinebeaMitsumi Passion to Create Value through Difference |
Net Sales Quarterly (Billions of yen) Quarterly net sales hit record high 99.5 117.0 145.4 138.7 127.4 168.2 178.7 135.6 120.3 154.8 167.4 196.4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY3/15 FY3/16 FY3/17 May 9, 2017 7 MinebeaMitsumi Passion to Create Value through Difference |
Operating Income Yearly (Billions of yen) Operating income Operating margin 12.1 22.2 8.6 10.2 32.2 60.1 51.4 49.0 56.0 5.3% 8.2% 3.4% 3.6% 8.7% 12.0% 8.4% 7.7% 7.5% Mar.'10 Mar.'11 Mar.'12 Mar.'13 Mar.'14 Mar.'15 Mar.'16 Mar.'17 Mar.'18E May 9, 2017 8 MinebeaMitsumi Passion to Create Value through Difference |
Machined Components Yearly Net sales (Billions of yen) Pivot assemblies Rod-ends/Fasteners Ball bearings 113.6 140.0 155.8 163.8 156.3 161.0 29.7 35.0 37.9 34.3 32.6 31.5 22.9 27.5 30.4 32.1 29.6 31.1 60.9 77.4 87.5 97.4 94.1 98.4 Mar.'13 Mar.'14 Mar.'15 Mar.'16 Mar.'17 Mar.'18E *Due to minor changes in segment classification from FY3/16, FY3/15 numbers are also adjusted for comparison. Operating income (Billions of yen) Operating income Operating margin 22.4% 24.0% 25.5% 24.9% 25.0% 25.5% 25.5 33.6 39.7 40.9 39.1 41.0 Mar.'13 Mar.'14 Mar.'15 Mar.'16 Mar.'17 Mar.'18E May 9, 2017 9 MinebeaMitsumi Passion to Create Value through Difference |
Machined Components Quarterly Net sales (Billions of yen) Pivot assemblies Rod-ends/Fasteners Ball bearings 36.6 37.1 40.2 41.9 41.0 42.3 40.8 39.8 39.2 37.3 38.5 41.3 9.2 9.2 10.1 9.5 8.3 9.5 8.9 7.6 7.6 7.9 8.7 8.4 6.8 7.2 7.7 8.7 8.1 8.0 7.8 8.2 8.0 7.1 6.8 7.7 20.7 20.7 22.4 23.7 24.6 24.8 24.0 24.0 23.6 22.3 23.1 25.2 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY3/15 FY3/16 FY3/17 *Due to minor changes in segment classification from FY3/16, FY3/15 numbers are also adjusted for comparison. Operating income (Billions of yen) Operating income Operating margin 26.1% 26.4% 25.1% 24.6% 24.3% 24.2% 26.0% 25.3% 26.5% 24.5% 24.7% 24.5% 9.6 9.8 10.1 10.3 10.0 10.2 10.6 10.1 10.4 9.1 9.5 10.1 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY3/15 FY3/16 FY3/17 May 9, 2017 10 MinebeaMitsumi Passion to Create Value through Difference |
Electronic Devices and Components Yearly Net sales (Billions of yen) Other Sensing devices Electronic devices Motors 167.9 230.5 344.7 445.5 441.6 397.0 8.8 7.4 5.2 3.6 4.0 4.1 9.3 10.7 13.4 35.9 38.3 33.8 47.9 72.7 170.9 245.0 241.0 184.3 101.9 139.7 155.3 161.0 158.3 174.8 Mar.'13 Mar.'14 Mar.'15 Mar.'16 Mar.'17 Mar.'18E *Due to minor changes in segment classification from FY3/16, FY3/15 numbers are also adjusted for comparison. Operating income (Billions of yen) Operating income Operating margin -1.5% 4.2% 8.9% 5.0% 5.0% 5.5% (2.5) 9.6 30.7 22.3 21.9 22.0 Mar.'13 Mar.'14 Mar.'15 Mar.'16 Mar.'17 Mar.'18E May 9, 2017 11 MinebeaMitsumi Passion to Create Value through Difference |
Electronic Devices and Components Quarterly Net sales (Billions of yen) Other Sensing devices Electronic devices Motors 62.9 79.9 105.2 96.8 86.3 125.8 137.8 95.7 80.9 117.4 128.7 114.6 1.6 1.1 1.5 1.1 0.7 0.7 0.7 1.2 0.7 0.9 1.2 1.3 2.7 2.8 3.2 4.7 8.2 9.7 9.4 8.6 8.6 8.9 8.5 12.3 21.8 38.1 60.5 50.4 37.8 73.3 87.3 46.6 32.2 68.9 80.9 58.9 36.8 37.9 39.9 40.6 39.7 42.0 40.2 39.1 39.4 38.8 38.0 42.1 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY3/15 FY3/16 FY3/17 *Due to minor changes in segment classification from FY3/16, FY3/15 numbers are also adjusted for comparison. Operating income (Billions of yen) Operating income Operating margin 5.1% 9.0% 11.1% 8.9% 6.5% 5.4% 5.5% 2.5% 0.5% 5.5% 7.3% 4.9% 3.2 7.2 11.7 8.6 5.6 6.7 7.6 2.4 0.4 6.4 9.4 5.6 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY3/15 FY3/16 FY3/17 May 9, 2017 12 MinebeaMitsumi Passion to Create Value through Difference |
Mitsumi Business (consolidated portion in 4Q) Quarterly Both net sales and operating income are consolidated for the period after business integration on January 27, 2017 Net sales (Billions of yen) 40.3 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY3/15 FY3/16 FY3/17 Operating income (Billions of yen) Operating income Operating margin 2.3 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY3/15 FY3/16 FY3/17 May 9, 2017 13 MinebeaMitsumi Passion to Create Value through Difference |
Mitsumi Business (including pre-merger) Quarterly Both net sales and operating income in and before 3Q FY3/17 are pre-merger results. 4Q FY3/17 results are based on managerial accounting for the three months. Net sales (Billions of yen) 26.5 41.4 45.6 39.6 34.2 49.5 40.4 39.5 32.6 44.6 47.8 52.9 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY3/15 FY3/16 FY3/17 Operating income (Billions of yen) Operating income Operating margin -12.5% 2.2% 6.4% 1.2% -5.0% 2.3% -5.0% -5.1% -10.7% -19.4% 7.1% -3.3 0.9 2.9 0.5 -1.7 1.1 -2.0 -2.0 -3.5 -1.5 -9.3 (*)3.0 3.7 (*) Excluding (Yen)12.3bn of inventory write-downs in 3Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY3/15 FY3/16 FY3/17 May 9, 2017 14 MinebeaMitsumi Passion to Create Value through Difference |
Mitsumi Business (including pre-merger) Yearly Both net sales and operating income in and before 3Q FY3/17 are pre-merger results. 4Q FY3/17 results are based on managerial accounting for the three months. Net sales (Billions of yen) 152.1 157.4 153.0 163.6 178.0 191.2 Mar.'13 Mar.'14 Mar.'15 Mar.'16 Mar.'17 Mar.'18E Operating income (Billions of yen) Operating income Operating margin -2.9% 0.4% 0.6% -2.8% -5.9% 5.2% (4.4) 0.6 1.0 (4.6) (10.6) (*)1.8 10.0 (*) Excluding (Yen)12.3bn of inventory write-downs in 3Q Mar.'13 Mar.'14 Mar.'15 Mar.'16 Mar.'17 Mar.'18E May 9, 2017 15 MinebeaMitsumi Passion to Create Value through Difference |
Net Income Yearly Net income hit record high (Billions of yen) Income attributable to owners of the parent Net income per share (yen) 6.7 12.5 5.9 1.8 20.9 39.9 36.4 41.1 41.5 17.2 32.6 15.6 4.8 55.9 106.7 97.3 107.3 98.0 Mar.'10 Mar.'11 Mar.'12 Mar.'13 Mar.'14 Mar.'15 Mar.'16 Mar.'17 Mar.'18E May 9, 2017 16 MinebeaMitsumi Passion to Create Value through Difference |
Net Income Quarterly Quarterly net income hit record high (Billions of yen) Income attributable to owners of the parent Net income per share (yen) 6.8 11.0 13.2 8.9 10.1 7.7 11.8 6.8 3.2 9.6 12.2 16.2 18.3 29.4 35.2 23.8 26.9 20.6 31.6 18.2 8.5 25.5 32.4 39.7 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY3/15 FY3/16 FY3/17 May 9, 2017 17 MinebeaMitsumi Passion to Create Value through Difference |
S.G. and A. Expenses Quarterly (Billions of yen) S.G. and A. expenses S.G. and A. sales ratio 13.8 14.9 15.4 15.9 17.0 18.3 18.4 18.1 17.4 18.7 17.4 23.3 13.8% 12.8% 10.6% 11.5% 13.3% 10.9% 10.3% 13.3% 14.5% 12.1% 10.4% 11.9% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY3/15 FY3/16 FY3/17 May 9, 2017 18 MinebeaMitsumi Passion to Create Value through Difference |
Inventories Quarterly (Billions of yen) 67.4 78.1 89.6 92.2 94.5 118.1 126.7 103.0 87.0 96.4 96.7 120.4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY3/15 FY3/16 FY3/17 May 9, 2017 19 MinebeaMitsumi Passion to Create Value through Difference |
Capital Expenditure and Depreciation Yearly (Billions of yen) Capital Expenditure Depreciation and Amortization Expenses 27.3 20.8 27.3 19.6 43.7 20.8 20.7 23.7 37.6 28.8 43.9 34.8 31.8 28.2 44.0 33.0 Mar.'11 Mar.'12 Mar.'13 Mar.'14 Mar.'15 Mar.'16 Mar.'17 Mar.'18E Forecast May 9, 2017 20 MinebeaMitsumi Passion to Create Value through Difference |
Net Interest-Bearing Debt/Free Cash Flow Yearly (Billions of yen) 103.6 114.2 136.2 109.9 93.1 97.5 70.9 56.2 -4.2 -8.8 -14.8 24.2 24.5 -1.1 36.3 21.9 Mar.'11 Mar.'12 Mar.'13 Mar.'14 Mar.'15 Mar.'16 Mar.'17 Mar.'18E Forecast Net interest-bearing debt Free cash flow May 9, 2017 21 MinebeaMitsumi Passion to Create Value through Difference |
Forecast for Fiscal Year Ending March 31, 2018 Expecting higher net sales and operating income YoY due to huge contribution from full-year consolidation of Mitsumi business (Millions of yen) FY3/17 Full Year FY3/18 1st Half 2nd Half Full Year YoY Net sales 638,926 376,400 373,600 750,000 +17.4% Operating income 49,015 26,300 29,700 56,000 +14.2% Ordinary income 48,393 25,800 29,200 55,000 +13.7% Income attributable to owners of the parent* 41,146 19,400 22,100 41,500 +0.9% Net income per share (yen) 107.33 45.83 52.20 98.03 -8.7% Foreign exchange rates FY3/17 Full Year FY3/18 Full Year Assumptions US$ (Yen)108.76 (Yen)105.00 Euro (Yen)119.34 (Yen)115.00 Thai Baht (Yen)3.09 (Yen)3.06 Chinese RMB (Yen)16.18 (Yen)16.00 May 9, 2017 22 MinebeaMitsumi Passion to Create Value through Difference |
Forecast for Business Segment (Millions of yen) FY3/17 Full Year FY3/18 1st Half 2nd Half Full Year YoY Net sales 638,926 376,400 373,600 750,000 +17.4% Machined components 156,310 80,200 80,800 161,000 +3.0% Electronic devices and components 441,615 202,500 194,500 397,000 -10.1% Mitsumi business 40,342 93,300 97,900 191,200 - Other 658 400 400 800 +21.6% Operating income 49,015 26,300 29,700 56,000 +14.2% Machined components 39,147 20,100 20,900 41,000 +4.7% Electronic devices and components 21,898 10,600 11,400 22,000 +0.5% Mitsumi business 2,315 4,400 5,600 10,000 - Other (120) (200) (200) (400) X3.3 Adjustment (14,223) (8,600) (8,000) (16,600) +16.7% May 9, 2017 23 MinebeaMitsumi Passion to Create Value through Difference |
MinebeaMitsumi Passion to Create Value through Difference Management Policy and Business Strategy May 9, 2017 Yoshihisa Kainuma Representative Director, President and Chief Executive Officer Page 24 |
Full-year forecast (FY3/2018) MinebeaMitsumi Passion to Create Value through Difference Turned-around money-losing businesses Focusing on strengthening money-earning businesses! Machined Components: to boost productivity to \50 billion OP Electronic Devices and Components: Motors will be #2 profit generator Mitsumi business: will boost bottom line by generating large profits (Billion yen) FY3/17 Full Year Forecast for FY3/18 1st Half 2nd Half Full Year YoY Net sales 638,926 Record High 376,400 373,600 750,000 +17.4% Operating income 49,015 26,300 29,700 56,000 +14.2% Ordinary income 48,393 25,800 29,200 55,000 +13.7% Income attributable to owners of the parent 41,146 Record High 19,400 22,100 41,500 +0.9% Net income / share (\) 107.33 Record High 45.83 52.20 98.03 8.7% $=\105 $=34.3 Baht May 9, 2017 25 |
Challenge to \1 trillion sales and/or \100 billion OP MinebeaMitsumi Passion to Create Value through Difference 1 and/or 100 by 2020 From investor meeting presentation on May 8, 2015 Progressing as planned ! by 2014 Completion of 2 pillars by 2017 Enlarge 2 pillars by 2020 3 Pillars including new products w/ wireless or other technology Former Mid-term plan achieved in 1st year Electronic Devices and Components become 2nd pillar Mid-term targets Further advance of businesses and new products Mid-to-long-term targets 1 trillion yen sales and/or 100 billion yen OP May 9, 2017 26 |
Challenge to \1 trillion sales and/or \100 billion OP MinebeaMitsumi Passion to Create Value through Difference 2020 goal benchmarks New Mid-term Business Plan targets (Billion yen) 0 200 400 600 800 1,000 (Billion yen) 0 20 40 60 80 100 Sales Operating income Sales not-included in New Mid-term Business Plan New products New products MandA 638.9 49 750 56 720 63 800 80 FY3/17 FY3/18 Plan FY3/19 Plan FY3/20 Plan FY3/21 Targets May 9, 2017 27 |
Estimated breakdown of \100 billion OP in FY3/2021 MinebeaMitsumi Passion to Create Value through Difference Breakdown Machined Components \50 billion Electronic Devices and Components \30 billion Mitsumi 20 billion M and A \15 billion Headquarters Expenses \-15 billion May 9, 2017 28 |
Machined Components plan targets MinebeaMitsumi Passion to Create Value through Difference Aiming for ball bearing production capacity of 285 million units/month in FY 3/18 (Improving productivity to get 35 million units / mo ) (Billion Yen) 0 50 100 150 200 250 (Billion Yen) 0 25 50 75 Pivot assembly sales Operating income Rod-ends / Fastener sales Ball bearing sales 156.3 161 170 184 39.1 41 44 49 32.6 31.5 30 31 29.5 31.1 35 39 94.1 98.4 105 114 FY3/17 FY3/18 Plan FY3/19 Plan FY3/20 Plan May 9, 2017 29 |
Ball bearing strategy MinebeaMitsumi Passion to Create Value through Difference Ample room to improve profitability! 1. No sign of slowdown in external demand 2. Creating the capacity to make 285 million units/month by FY 3/18 3. Expanding sales activity further External ball bearing shipments (million units / month) Due to production capacity increases by productivity improvement 0 100 150 200 250 137 145 155 171 190 209 233 +15 +25 +35 175 184 198 FY3/14 FY3/15 FY3/16 FY3/17 FY3/18 Plan FY3/19 Plan FY3/20 Plan May 9, 2017 30 |
Growth of miniature ball bearings for automobiles MinebeaMitsumi Passion to Create Value through Difference Environmentally friendly/Energy saving Exhaust Gas Recirculation Urea-based SCR Electronic Throttle Valve Turbo Charger etc. Safety Lighting Systems Antilock Brake System Electronic Stability Control etc. Comfort Seat Fan Rear Gate Opener etc. Growth of miniature ball bearings for automobiles FY3/08=100 50 100 150 200 250 300 MinebeaMitsumi ball bearing sales volume for automobile Global automobile production FY3/17-FY3/20 CAGR +10.0% FY3/17-FY3/20 CAGR +1.7% FY3/08 FY3/11 FY3/14 FY3/17 FY3/20 Forecast Sources: IHS, MinebeaMitsumi May 9, 2017 31 |
Aircraft component strategy MinebeaMitsumi Passion to Create Value through Difference Aiming to boost profitability 1. By changing the production system from beginning to end, we aim to double per capita productivity. 2. While super large aircraft production is falling, mid-to-small aircraft production is rising. 3. Trying to boost per-aircraft sales by selling more mechanical parts 4. Focusing on hard-to-process materials and value-added components Mechanical Parts for Aircraft Boeing and Airbus Commercial aircraft shipments (# of aircrafts) 400 800 1,200 1,600 2,000 CAGR(2016-2019) 9.0% / year 2015 2016 2017 Forecast 2018 Forecast 2019 Forecast Sources: Boeing, Airbus, forecast by MinebeaMitsumi May 9, 2017 32 |
Pivot assembly strategy (HDD) MinebeaMitsumi Passion to Create Value through Difference Focusing on market share to maintain profits Working in a gradually shrinking HDD market Taking advantage of high quality and lower production cost of ball bearings HDD market forecast Enterprise Nearline 3.5"ATA 2.5"Mobile (Million units) 0 100 200 300 400 500 426 400 374 352 330 FY17/3^`FY20/3 CAGR - 6.2% FY3/16 FY3/17 FY3/18 Forecast FY3/19 Forecast FY3/20 Forecast Sources: TSR, forecast by MinebeaMitsumi May 9, 2017 33 |
Electronic Devices and Components plan targets MinebeaMitsumi Passion to Create Value through Difference Motors will drive overall growth of #2 pillar (Billion Yen) 0 100 200 300 400 500 (Billion Yen) 0 10 20 30 40 50 Motor sales Operating income Electronic device sales Sensing device sales Other sales 441.6 397 345 400 21.9 22 20.5 30 4 4.1 4 4 38.3 33.8 38 45 241 184.3 108 130 158.3 174.8 195 221 FY3/17 FY3/18 Plan FY3/19 Plan FY3/20 Plan May 9, 2017 34 |
LED backlight strategy - 1 MinebeaMitsumi Passion to Create Value through Difference LED backlights move to matured stage 1. Sales will decline, but aim to maintain profits Growing market share in China will help make up for major customer's declining order volume. Completion of accelerated depreciation will contribute to profits. 2. Shifting focus to automobile applications Developing parts and modules(P.52) 3. Ongoing RandD to vie with OLED displays Moving forward with supply chain companies in using narrow bezel LED backlights Continuing development of curved LED backlights May 9, 2017 35 |
LED backlight strategy - 2 MinebeaMitsumi Passion to Create Value through Difference Shifting focus to automobile applications 1. Further sales expansion of high-value-added products for high-end automobiles (Aiming for \16 billion sales in FY3/18) 2. Utilizing new Slovakian plant to go on line in early 2018 Instrument Cluster Center Stack Display Growth of automobile displays (Million units) 0 50 100 150 Instrument Cluster Center Stack Display 115 128 139 147 65 70 74 77 50 59 65 70 +11.2% in 2017 2016 2017 Forecast 2018 Forecast 2019 Forecast Source: HIS May 9, 2017 36 |
LED backlight strategy - 3 MinebeaMitsumi Passion to Create Value through Difference For SALIOT (LED lighting) and smart street lights 1. Aiming \5 billion SALIOT sales in mid-term Global sales network has been expanding. Strengthening product lineup further A new show room will be open in August this year. 2. Expanding smart street lights as next generation IoT products RandD, production and marketing tie-ups with OSRAM, Iwasaki Electric Fusion with Mitsumi connectivity components Temperature /humidity sensor Air flow sensor Air pressure sensor Small size camera Millimeter-wave radar May 9, 2017 37 |
Motor strategy MinebeaMitsumi Passion to Create Value through Difference Profit growth from automobile applications Focusing further on automobiles, which are utilizing more and more motors Pursuing niche markets and cost advantages Utilizing new Slovakian plant in operation in early 2018 BLDC Motor PM Motor DC Brush Motor DC Brush Motor PM Motor PM Motor Fan Motor Fan Motor May 9, 2017 38 |
Sensing device strategy (Minebea business) MinebeaMitsumi Passion to Create Value through Difference Stable growth in pre-acquisition businesses and synergy with Sartorius MTandH 1. Stable growth in pre-acquisition businesses Promoting sales of passenger seat sensors for the North American automobile market and others 2. Synergy with Sartorius MTandH Utilizing in house components Cross selling to expand customer base Utilizing Bengaluru, India plant 3. Building a platform of our future healthcare business Moving toward commercialization of medical bed sensors (will be announced soon) Expanding business for key IoT components employing MEMS sensors Seat sensors High-end measuring equipment Medical bed sensors May 9, 2017 39 |
Mitsumi business plan targets MinebeaMitsumi Passion to Create Value through Difference Becoming next pillar as profits surge this fiscal year Impacts of integration 1. Highly strengthened RandD capabilities 2. Positive impact on OP (down arrow) No more worry on dilutive impacts on profits Effects of share swap scheme 1. Benefits of negative goodwill and increased amount available for dividends 2. Stronger B/S 3. Smaller impacts on # of shares issued by utilizing treasury stock (Billion Yen) 0 50 100 150 200 250 (Billion Yen) (15) 0 15 30 45 60 75 Sales Operating income 178 191.2 204 215 (10.6) 10 12.5 16 FY3/17 FY3/18 Plan FY3/19 Plan FY3/20 Plan * FY3/17 is managerial accounting base, not audited May 9, 2017 40 |
Reviewing product portfolio - 1 MinebeaMitsumi Passion to Create Value through Difference Aggressive allocation of people and resources Core Competitive in niche markets + Permanent Sub-core Innovative?{Non-permanent Non-core Low margin or Price niche Growth Improving profits and Next generation product RandD Selection and concentration May 9, 2017 41 |
Reviewing product portfolio - 2 MinebeaMitsumi Passion to Create Value through Difference Profit sources Core Industry staples Are a constant Sub-core Smartphone components Game consoles HDD components, etc. Non-core Low sales Low margin Low growth potential May 9, 2017 42 |
Seven Spears of MinebeaMitsumi MinebeaMitsumi Passion to Create Value through Difference The 7 Spears Bearings Motors Sensors Connectors/Switches Power supplies Wireless/Telecommunications/Software Analog semiconductors May 9, 2017 43 |
Seven spears - 3 Sensors MinebeaMitsumi Passion to Create Value through Difference Centering on strain gauge and MEMS sensor technology Exploring possibilities of temperature/environment sensors Expanding business for key IoT components employing strain gauges Strain gauges Gauge pressure sensors Air pressure sensors Pressure sensors Temperature/environment sensor market (forecast) 2019 Forecast \2 trillion Flowmeter sensors\840 billion (under development) Temperature /Moisture sensors\230 billion (under development) Others\180 billion Pressure sensors\780 billion Sources: Fuji Chimera Research institute May 9, 2017 44 |
Seven spears - 4 Connectors / Switches MinebeaMitsumi Passion to Create Value through Difference Key words are ultra-precision / water-proof Taking advantage of ultra-precision machining Targeting hard-to-process components - Focusing on high-speed transmission (automobiles and USB Type-C) USB Type-C Automobile Connectors (HSD) Automobile Connectors (FAKRA) Automobile Connectors (USCAR-30) Tactile Switches Connector/Switch market (forecast) Tactile Switches Telecommunications Automotive (Billion Yen) 0 1,000 2,000 3,000 4,000 \4 trillion market 2015 2016 2017 Forecast 2018 Forecast 2019 Forecast Source: Sangyo-Joho Limited May 9, 2017 45 |
Seven spears - 5 Power supplies MinebeaMitsumi Passion to Create Value through Difference Win the IoT era with high-quality / high-function Focus on lower than 70W products (quality / reliability) Build sales by exploring existing markets Optimize factory portfolio AC adapters for information equipment AC chargers for Li-ion battery pack Power supplies for BD/DVD recorders Switching power supply market (forecast) (Billion US$) 0 18 20 22 24 \2.5 trillion market 2015 2016 2017 Forecast 2018 Forecast 2019 Forecast Source: EMJ May 9, 2017 46 |
Seven spears - 6 Wireless / Telecommunications / Software MinebeaMitsumi Passion to Create Value through Difference Growth with automobile applications and responding to IoT Aim to capture market for combined components of ADAS (advanced driver assistance system) RandD of next generation antennas Utilize India / Slovakia factories Shark fin antennas Bluetooth modules GPS antennas HD-PLC adapters Antenna market (forecast) (Billion Yen) 0 20 40 60 80 100 120 140 FY3/17^`FY3/20 CAGR +8.2% FY3/16 FY3/17 FY3/18 Forecast FY3/19 Forecast FY3/20 Forecast Sources: Mark Lines Co., forecasts by MinebeaMitsumi May 9, 2017 47 |
Seven spears - 7 Analog semiconductors MinebeaMitsumi Passion to Create Value through Difference Analog semiconductors - the IoT entrance and exit ways Focus on high-value-added products (such as ADC, etc.) Accelerate RandD of next generation products Strengthen power semiconductor foundry operations Protection ICs for Li-ion batteries AC/DC converter ICs Analog front-end ICs Market size in 2016 Battery ICs \35 billion Power Supply ICs \370 billion MEMS sensors \1,600 billion Source: MinebeaMitsumi May 9, 2017 48 |
Basic policy of sub-core businesses MinebeaMitsumi Passion to Create Value through Difference Improve our competitive edge by boosting productivity across the board and developing new products with an eye to the risk of a shrinking market Optical devices 1. Expand OISs and VCMs for Chinese customers 2. Consider producing some products in Cambodia Mechanical components 1. Consider producing some products in Cambodia 2. IoT hybrid component RandD and sales May 9, 2017 49 |
Developing strategic new products by fusion with Mitsumi's technology/products MinebeaMitsumi Passion to Create Value through Difference Developing high value-added solutions that combine input, conversion/control, and output devices Product lineup Input devices Strain gauges MEMS sensors - Pressure - Atmospheric - Air flow - Temperature / humidity - Proximity, body (object) detection - 6-axis force Camera modules Antennas Conversion/control devices Inverter circuits Driver circuits IC for power supply IC for protecting battery Switching power supply Wireless telecommunications Connectors Output devices Motors Actuators Haptic devices LED backlights Lighting devices Bearings May 9, 2017 50 |
Re-enter haptic device business MinebeaMitsumi Passion to Create Value through Difference Development of small actuators by sharing core technologies Small actuators Linear actuators - Sharing core technologies for health care actuators - Circular, Rectangular, Square Electric toothbrush Beauty devices Vibration elements Automotive Healthcare Haptics Automotive Consume products Uniaxial variable Actuators Automotive Consume products Use in automobiles Infotainment Steering wheel Air conditioner switch Multifunction switch on Steering wheel Touch pad Shift lever Rotary switch Accelerator/Brake pedal Seat (Cushion, Back rest) Window switch May 9, 2017 51 |
Development of haptic module MinebeaMitsumi Passion to Create Value through Difference Boost automobile device business via fusion with Minebea and Mitsumi technology/products Instrument Cluster Center Stack Display Strain gauges Actuators LED backlights Connectors Aim to expand as key IoT components May 9, 2017 52 |
Development of IoT-related products MinebeaMitsumi Passion to Create Value through Difference Many RandD projects enhanced by fusion with Mitsumi's technology/products are currently in the works! Main target markets for IoT products Automobile Healthcare Infrastructure New devices which connect people to things and things to things can become pillar #3. May 9, 2017 53 |
Financial strategy MinebeaMitsumi Passion to Create Value through Difference 1. Use of cash - Current net interest-bearing debt level is appropriate. - Priority for cash usage is on growth (capital expenditures, MandAs). - Next priority is returning cash to investors. 2. Dividend policy - FY3/2017 Interim \7/share, Year-end \7/share, Total \14/share (About a 20% payout ratio, excluding non-cash negative goodwill) - FY3/2018(forecast) Interim \10/share, Year-end \10/share, Total \20/share (Aiming for about a 20% payout ratio) 3. Share buyback (announced on February 13, 2017) - Number of shares: Up to 12 million shares (equal to 2.82% of total issued shares excluding treasury stock) - Amount: Up to 15.0 billion yen - Period: From February 14, 2017 to September 22, 2017 May 9, 2017 54 |
Cash flow, debt, cap-ex and DandA plan MinebeaMitsumi Passion to Create Value through Difference Net interest-bearing debt and Free cash flow plan (Billion Yen) Net interest-bearing debt Free cash flow 109.9 93.1 97.5 70.9 56.2 32.4 (9.1) 24.2 24.5 (1.1) 36.3 21.9 32.3 50 FY3/14 FY3/15 FY3/16 FY3/17 FY3/18 Plan FY3/19 Plan FY3/20 Plan Capital expenditures and Depreciation and amortization plan (Billion Yen) Cap-ex DandA 20.7 23.7 37.6 28.8 43.9 34.8 31.8 28.2 44 33 43 36 38 36 FY3/14 FY3/15 FY3/16 FY3/17 FY3/18 Plan FY3/19 Plan FY3/20 Plan May 9, 2017 55 |
M and A strategy MinebeaMitsumi Passion to Create Value through Difference Toward FY3/2021 targets, aiming to capture additional profit sources 1. Aiming for MandAs that will boost machined components business 2. Will explore MandA and alliance opportunities in specific fields and with an eye to particular targets May 9, 2017 56 |
MinebeaMitsumi Passion to Create Value through Difference Business Results MinebeaMitsumi Inc. http://www.minebeamitsumi.com/ 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 from any particular projection due to various factors. Factors affecting our actual performance include but are not limited to: (i) changes in economic conditions or demand trends related to MinebeaMitsumi's business operations; (ii) fluctuation of foreign exchange rates or interest rates; and (iii) our ability to continue RandD, manufacturing and marketing in a timely manner in the electronics business sector, where technological innovations are rapid and new products are launched continuously. All the information in this document is the property of MinebeaMitsumi Inc. All parties are prohibited, for whatever purpose, to copy, modify, reproduce, transmit, etc. this information regardless of ways and means without prior written permission of MinebeaMitsumi Inc. May 9, 2017 57 |