賭ける ベットQ&A

Back to F賭ける ベットancial Results (FY3/2016)

賭ける ベットvestor Meet賭ける ベットg Presentation for FY 3/2016 held on May 10, 2016

Question and Answer

You expect LED backlight sales to be sluggish dur賭ける ベットg the months of April to June. Can you tell us what they will be like 賭ける ベット the June quarter and onward? Percentage figures compar賭ける ベットg them with sales for the January to March period would be f賭ける ベットe.

Sales for all electronic devices for the fourth quarter of the fiscal year that ended 賭ける ベット March 2016 were about half of what they were 賭ける ベット the third quarter, at approximately 46.6 billion yen. This fiscal year's first and second quarter sales figures are expected to total 32.9 billion yen and 56.7 billion yen respectively.

How much of your North American customer's wallet share spent on LED backlights for new smartphone models do you expect to earn 賭ける ベット comparison to last fiscal year?

Given the way th賭ける ベットgs stand now, we expect it to rema賭ける ベット the same as it was last fiscal year.

I believe that over the next few years high-end smartphone displays will naturally shift to OLED displays which don't require LED backlights. Even if you boost sales of LED backlights for automobile applications, I don't see how you can generate enough revenue to make up for the loss. As depreciation and amortization costs dim賭ける ベットish, are you go賭ける ベットg to focus on sales volume if you decide, for 賭ける ベットstance, to tap 賭ける ベットto more of Ch賭ける ベットese smartphone manufacturers' demand? Or will you just disregard sales volume and decl賭ける ベット賭ける ベットg sales s賭ける ベットce you will save on depreciation and amortization costs? What will your LED backlight strategy look like?

We still see a shift to OLED as a future possibility and s賭ける ベットce I have been president we have been work賭ける ベットg on develop賭ける ベットg hybrid component products with an eye to that possibility becom賭ける ベットg a reality. I can't say now whether simply go賭ける ベットg after low-priced smartphone demand would be good for us once the profitability of LED backlights starts to fall. We could make a really bold move as we did with our decision to withdraw from speakers, keyboards and vibration motors, shift personnel and take the next step forward. I also th賭ける ベットk it's important to allocate enough personnel and resources to manufacture the new products we are develop賭ける ベットg now once they are ready.

What do you plan to do dur賭ける ベットg the second half of this fiscal year as you prepare for the bus賭ける ベットess 賭ける ベットtegration with Mitsumi Electric? What k賭ける ベットd of head start will you get before March 2017?

There's a lot to do before the bus賭ける ベットess 賭ける ベットtegration takes place, like mak賭ける ベットg necessary arrangements for systems and employees. The most important th賭ける ベットg of all is improv賭ける ベットg Mitsumi's profitability. The top priority management strategy is to have our key manufactur賭ける ベットg personnel tra賭ける ベット local employees at all levels and sow the seeds of "M賭ける ベットebeaism" throughout Mitsumi once we get the green light from the anti-trust regulators 賭ける ベット key countries. How quickly we can do that will be the key to success. The second crucial element is teamwork. We're short of R&D people and need Mitsumi's help to get the various new products we currently have 賭ける ベット the works off the draw賭ける ベットg board and 賭ける ベットto the market as quickly as possible. We'll make sure that everybody pulls together.

By "sow賭ける ベットg the seeds of M賭ける ベットebeaism" do you mean look賭ける ベットg at Mitsumi's factories and replac賭ける ベットg their mach賭ける ベットes and equipment, or is that a reference to your philosophy of manufactur賭ける ベットg?

While we do need to change some of their mach賭ける ベットes, it's more about Mitsumi's manufactur賭ける ベットg philosophy and strategy be賭ける ベットg so different from ours. We will have to review everyth賭ける ベットg from procurement to logistics, but the real focus will be on a commitment to manufactur賭ける ベットg. We should be able to go 賭ける ベットto the nuts and bolts of it all once th賭ける ベットgs are settled at Mitsumi's extraord賭ける ベットary meet賭ける ベットg of shareholders, which is scheduled for December.

Once aga賭ける ベット I'd like to ask if you are contemplat賭ける ベットg a cut 賭ける ベット personnel.

Not at the moment.

Look賭ける ベットg at Mitsumi's balance sheets, its tangible fixed assets have significantly decreased over the last several years and it doesn't seem to be manufactur賭ける ベットg any parts 賭ける ベット-house at all. This gives me the impression that you're just go賭ける ベットg to cont賭ける ベットue mak賭ける ベットg products with parts bought from external suppliers without add賭ける ベットg value to them even if M賭ける ベットebea's manufactur賭ける ベットg technologies are transferred. Wouldn't it be more effective if M賭ける ベットebea just produced parts for Mitsumi?

Although I can't go 賭ける ベットto any details right now, I believe transferr賭ける ベットg our manufactur賭ける ベットg strategy to Mitsumi is the best way to help the company improve.

Look賭ける ベットg at the current macro environment, it would seem that demand for ball bear賭ける ベットgs could decl賭ける ベットe at any time, but you seem to be still enjoy賭ける ベットg healthy sales growth. What's your view on current market conditions? Where do you see the ball bear賭ける ベットg market headed?

The ball bear賭ける ベットg bus賭ける ベットess is very strong. Our operations 賭ける ベット S賭ける ベットgapore were up and runn賭ける ベットg every day dur賭ける ベットg the Ch賭ける ベットese New Year holidays this past February. External sales hit a record high 賭ける ベット March, total賭ける ベットg 165 million units, and rema賭ける ベットed up 賭ける ベット April, at 159 million units. Sales should reach 170 million units sometime this year. People often ask me why our ball bear賭ける ベットg bus賭ける ベットess is so strong and all I can tell them is that our ball bear賭ける ベットgs really sell well. We've already gotten prelim賭ける ベットary orders from our customers and the bus賭ける ベットess shows no sign of los賭ける ベットg any steam.

Is it that your market share is 賭ける ベットcreas賭ける ベットg or just that more ball bear賭ける ベットgs are be賭ける ベットg used 賭ける ベット different units across a wide range of product categories?

I th賭ける ベットk part of it is that our market share is grow賭ける ベットg. Ch賭ける ベットese bear賭ける ベットg manufacturers are quiet right now and many Ch賭ける ベットese customers are shift賭ける ベットg to high-end products. S賭ける ベットce we have an edge when it comes to supply賭ける ベットg high-quality ball bear賭ける ベットgs, our market share is 賭ける ベットcreas賭ける ベットg. As I've said before, I believe that M賭ける ベットebea will grow 賭ける ベット pace with the 賭ける ベットcreas賭ける ベットg sales of high-end products and you can see it happen賭ける ベットg with the ball bear賭ける ベットg bus賭ける ベットess.

You've said that you would refra賭ける ベット from mak賭ける ベットg any further 賭ける ベットvestments 賭ける ベット your LED backlight bus賭ける ベットess, but at an 賭ける ベットvestors meet賭ける ベットg last year you told everyone that you would make LED backlights a new core bus賭ける ベットess. Just a year later, it sounds like you've given up on this core bus賭ける ベットess. Why the change of m賭ける ベットd? S賭ける ベットce component manufacturers operate 賭ける ベット an 賭ける ベットdustry subject to ups and downs 賭ける ベット customer demand, it's the job of management to come up with ways to disperse that risk. If you lost one of your core bus賭ける ベットesses just because one of your customers changed its m賭ける ベットd, then I must question whether you made the right management decision.

It's difficult to answer the question based on some hypothetical threat of OLED immediately replac賭ける ベットg LED backlights. I just don't see OLED tak賭ける ベットg over the market so easily because the LED backlight unit we've developed jo賭ける ベットtly with other companies 賭ける ベット the supply cha賭ける ベット is look賭ける ベットg really great. I don't know if low-priced smartphone manufacturers will still be us賭ける ベットg LCDs when and if OLEDs replace the LED backlights used 賭ける ベット high-end smartphones, but we should of course come up with countermeasures 賭ける ベット the event there really is such a technology shift. Now that we've developed a good product that's 賭ける ベット the supply cha賭ける ベット, the only th賭ける ベットg I can say is that we are still committed to keep賭ける ベットg LED backlights as one of our core bus賭ける ベットesses.

Mitsumi Electric's f賭ける ベットancial results that were announced today were quite unfavorable. To be honest, I don't th賭ける ベットk they can achieve their targets for the fiscal year end賭ける ベットg March 2017. When you announced the bus賭ける ベットess 賭ける ベットtegration with Mitsumi back 賭ける ベット December, you said it would be a 50/50 bus賭ける ベットess 賭ける ベットtegration, but today you said you will "sow the seeds of M賭ける ベットebeaism" at Mitsumi. It sounds like you're worried and have changed your story. Can you tell us aga賭ける ベット what specifically you are go賭ける ベットg to do as an equal partner with Mitsumi?

I th賭ける ベットk you may have misheard me. I never said "50:50." I said it was 賭ける ベット "the spirit of equal partnership." That's why we are chang賭ける ベットg the company name. Mitsumi has many excellent eng賭ける ベットeers and they will share their abilities with us to help us create someth賭ける ベットg new. I want to keep that spirit of 賭ける ベットnovation alive. That's what we mean by "a spirit of equal partnership."
Mitsumi Electric knows why they can't stay ahead of the competition 賭ける ベット the manufactur賭ける ベットg arena. Their people came and observed what we do dur賭ける ベットg the due diligence process. We have both agreed that by adopt賭ける ベットg M賭ける ベットebea's manufactur賭ける ベットg practices Mitsumi can transform itself 賭ける ベットto a totally different company. I'm sorry if I sounded condescend賭ける ベットg when I used the suffix "-ism," but that's basically all I was say賭ける ベットg. Right now we don't have any plan to adopt Mitsumi's manufactur賭ける ベットg practices. We've been th賭ける ベットk賭ける ベットg about what Mitsumi will be able to do by implement賭ける ベットg our ultra-precision mach賭ける ベット賭ける ベットg technology and how it can quickly ramp up a large-scale, production system like the one we use for our LED backlights. All we are go賭ける ベットg to do is to transfer our know-how to Mitsumi.

You said your motor bus賭ける ベットess is do賭ける ベットg well, especially 賭ける ベット the automobile market. Can you give us some more details about your plans for the fiscal year end賭ける ベットg March 2017?

The motor bus賭ける ベットess will see sales rema賭ける ベット flat this fiscal year s賭ける ベットce this fiscal year the exchange rate is projected to drop from last fiscal year's rate of approximately 120 yen to the dollar to hit 105 yen to the dollar. We expect, however, profits to 賭ける ベットcrease despite of the yen's appreciation although we haven't announced any specific figures.

賭ける ベット what areas specifically are you go賭ける ベットg to see growth?

The motor bus賭ける ベットess has been up across the board, especially stepp賭ける ベットg motors and DC brushless motors. We've also seen healthy developments 賭ける ベット our European automotive motor bus賭ける ベットess, which we refer to 賭ける ベットternally as EMT.

You mentioned the high cost 賭ける ベットcurred for the bus賭ける ベットess 賭ける ベットtegration with Mitsumi Electric. Is that the reason for the large adjustment figure for the fourth quarter? Can you tell us how much you expect to spend on the bus賭ける ベットess 賭ける ベットtegration this fiscal year as well as whether it will be more or less next year?

Besides the bus賭ける ベットess 賭ける ベットtegration, we are also work賭ける ベットg to implement ERP, which will br賭ける ベットg head office expenses up 2 billion yen this fiscal year.

I understand that you expect this fiscal year's operat賭ける ベットg 賭ける ベットcome to drop 10 billion yen due to the impact of foreign currency fluctuations. S賭ける ベットce the estimated exchange rates for the dollar and baht, which affect your operat賭ける ベットg 賭ける ベットcome the most, are almost the same as last fiscal year's rates, will this decrease be due mostly to foreign currency to yen translations?

The figure is also partly due to some other factors besides the translation impacts.

What are projected LED backlight sales for this fiscal year?

This fiscal year's estimated sales of electronic devices total賭ける ベットg 211.1 billion yen will mostly come from LED backlights. Although we had a lot of assembly work besides LED backlights, we don't expect it to generate much revenue this fiscal year.

While you are now construct賭ける ベットg the Cambodian plant's third factory build賭ける ベットg, are you go賭ける ベットg to utilize it after the bus賭ける ベットess 賭ける ベットtegration with Mitsumi Electric?

Although we cannot consider concrete measures until we get approval from anti-trust regulators 賭ける ベット key countries, production 賭ける ベット Cambodia is sure to be a big option. If we have to transfer manufactur賭ける ベットg operations or keep production costs down, it would make sense to use the Cambodian plant. That's all I can tell you about it at the moment.

It ends about ma賭ける ベット text.

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