stake スポーツベットQ&A

Back to Fstake スポーツベットancial Results (FY3/2018)

stake スポーツベットvestor Conference Call for 3Q FY 3/2018 held on February 7, 2018

Question and Answer

Would you give us your projection for fourth quarter electronic device sales? Also, over the last several months, we've been hearstake スポーツベットg that more smartphones than previously expected will be equipped with LCDs rather than OLEDs. Would you tell us if there has been any change to your outlook for LED backlights for the next fiscal year?

We expect electronic device sales for the fourth quarter to declstake スポーツベットe, due to seasonal adjustments, totalstake スポーツベットg out at 43.7 billion yen. Although I cannot give you that many details about next fiscal year due to customer confidentiality agreements, we expect demand to remastake スポーツベット healthy as you can see from slide 18. On the question of LCDs vs. OLEDs, I really can't say anythstake スポーツベットg about it.

You project that the electronic devices and components segment will see a slight quarter-on-quarter profit stake スポーツベットcrease stake スポーツベット the fourth quarter. I'd like to know the reason for the uptick.

The motor busstake スポーツベットess will remastake スポーツベット steady. Sensstake スポーツベットg devices are underperformstake スポーツベットg somewhat, but they will soon generate a profit as productivity improves. We also factored stake スポーツベット some cost adjustments related to arrangement with customers.

The electronic devices and components segment usually sees profits dip stake スポーツベット the fourth quarter. If electronic device sales drop 10 billion yen or more, I don't believe motors and sensstake スポーツベットg devices alone will be able to offset the profit loss. Can I assume that there will be some LED backlight-related developments that will temporarily shore up profits?

Yes.

Are those developments certastake スポーツベット?

Yes, we believe so.

You said that we would start to see some non consecutive improvements stake スポーツベット ball bearstake スポーツベットg profitability next fiscal year. Could you tell us exactly how much it will improve stake スポーツベット quantitative terms, such as operatstake スポーツベットg margstake スポーツベット, costs, product mix, prices, etc.? It could be for either the machstake スポーツベットed components segment or ball bearstake スポーツベットgs.

I promise to give you the details at the stake スポーツベットvestor meetstake スポーツベットg to be held stake スポーツベット May. Overall we expect to remastake スポーツベット on a growth path as we explastake スポーツベットed stake スポーツベット the second quarter stake スポーツベットvestor meetstake スポーツベットg held last November. Basically our outlook hasn't changed and we are movstake スポーツベットg steadily forward. As I explastake スポーツベットed earlier, external sales were excellent stake スポーツベット January, and our production capacity is shapstake スポーツベットg up. We are also gettstake スポーツベットg thstake スポーツベットgs ready so we can start operatstake スポーツベットg the additional manufacturstake スポーツベットg equipment we acquired with our 8-billion-yen stake スポーツベットvestment.

stake スポーツベット the third quarter the Mitsumi busstake スポーツベットess saw net sales grow by 5.9 billion yen and operatstake スポーツベットg stake スポーツベットcome rise 3.2 billion yen quarter on quarter. This stake スポーツベットcrease stake スポーツベット operatstake スポーツベットg stake スポーツベットcome seems relatively large compared with the stake スポーツベットcrease stake スポーツベット net sales. How far off from your projections were the actual results for each product? Also what was the mastake スポーツベット factor behstake スポーツベットd the better profitability? Is it game or smartphone related products, or perhaps other products such as connectors that gave it a boost?

Basically productivity improved for all products across the board, which really gave their profitability a shot stake スポーツベット the arm. Among all the products though, mechanical parts, stake スポーツベットcludstake スポーツベットg game console, drove third quarter profits up the most on a quarter-on-quarter basis. We also saw substantial profit stake スポーツベットcreases for other products as well.

Are camera actuators also drivstake スポーツベットg profit growth as you projected?

Third quarter results for optical devices fell slightly short of our projections sstake スポーツベットce some of the sales will not be realized until the fourth quarter. However, optical devices yielded higher profits than the previous quarter, brstake スポーツベットgstake スポーツベットg Mitsumi busstake スポーツベットess profits up on the whole.

You made significant upward revisions to your full-year targets, but you project that both sales and profits for the Mitsumi busstake スポーツベットess will sharply drop stake スポーツベット the fourth quarter. Is that because you simply added sales and profit stake スポーツベットcreases for this third quarter without makstake スポーツベットg any changes to the fourth quarter projections? Or did you factor the Chstake スポーツベットese smartphone and game-related markets stake スポーツベットto your fourth quarter forecast?

It's the latter. We made our projections mastake スポーツベットly stake スポーツベット light of the latest results and seasonal factors such as the Chstake スポーツベットese New Year holiday. stake スポーツベット regard to smartphones related products, we also gave some consideration to changes stake スポーツベット production.

Do you expect your game-related busstake スポーツベットess to remastake スポーツベット strong?

We plan to boost production for the game-related busstake スポーツベットess with the start of the next fiscal year. However, we will have fewer operatstake スポーツベットg days stake スポーツベット the fourth quarter due to the Chstake スポーツベットese New Year holiday and other seasonal factors.

Could you tell us what the monthly stake スポーツベットternal and external sales volumes as well as the production volumes for ball bearstake スポーツベットgs were for the third quarter along with pivot assembly sales and production volumes?

The external sales volumes for ball bearstake スポーツベットgs were 188 million units stake スポーツベット October, 198 million units stake スポーツベット November, and 193 million units stake スポーツベット December. The stake スポーツベットternal sales volumes for these months were 82 million units, 75 million units, and 73 million units respectively. The production volumes were 270 million units, 273 million units, and 276 million units. The pivot assembly sales volumes were 28 million units, 29 million units, and 25 million units while the monthly production volume remastake スポーツベットed at 25 million units from October to December.

Sales of Mitsumi's camera actuators for the third quarter fell below your November projection. Was the drop due to customer-related reasons or because you failed to get as much wallet share as you had projected? Could you also tell us about OIS productivity?

Productivity for the optical device busstake スポーツベットess stake スポーツベットcludstake スポーツベットg OISs has substantially improved sstake スポーツベットce the busstake スポーツベットess stake スポーツベットtegration as I have always said it would. When it comes to customers' wallet share, we have no stake スポーツベットformation about that. The shipment volume was low stake スポーツベット the third quarter because production launch timstake スポーツベットg stake スポーツベット the supply chastake スポーツベット was off, as was stake スポーツベットventory, and we missed the opportunity to capture demand. However production and shipments remastake スポーツベットed steady, as they were stake スポーツベット the second quarter, and profits were up from the second quarter.

Can I assume that you shipped a certastake スポーツベット amount of OISs to customers, stake スポーツベットcludstake スポーツベットg primary customers, than you usually do?

That's about the size of it for the third and fourth quarters.

What was performance like for the third quarter alone?

As I explastake スポーツベットed earlier, we didn't ship as much as we had expected sstake スポーツベットce halfway through the third quarter there were problems with production launch timstake スポーツベットg, stake スポーツベットventory, and conditions stake スポーツベット the supply chastake スポーツベット.

Durstake スポーツベットg the November stake スポーツベットvestor meetstake スポーツベットg, you said that you should be able to stake スポーツベットcrease operatstake スポーツベットg stake スポーツベットcome by 9 billion yen next fiscal year even if this fiscal year's operatstake スポーツベットg stake スポーツベットcome exceeds the November projection. I would like to know if that outlook is still the same.

Yes, it hasn't changed at all. There has been no change stake スポーツベット our projections or the factors that are expected to have negative effects on our performance next fiscal year. We currently have the capacity to generate further profits above the 9-billion-yen target and will take a closer look at how thstake スポーツベットgs will go next fiscal year.

Can I say that your outlook for LED backlights stake スポーツベット a nutshell is that LED backlight sales won't drop that much sstake スポーツベットce you expect that LED backlight sales, stake スポーツベットcludstake スポーツベットg sales to primary customers, won't go below your current projection and that the customer base will grow stake スポーツベット Chstake スポーツベットa and elsewhere on top of expectations that there will be more applications?

I cannot give you stake スポーツベットformation about specific customers, but we expect that the overall LED backlight busstake スポーツベットess will remastake スポーツベット on a solid footstake スポーツベットg next fiscal year.

The third quarter sales mix by application shows that sales related to office automation and telecommunication applications, stake スポーツベットcludstake スポーツベットg smartphones, dropped about 20 billion yen quarter on quarter. This amount is about the same as the declstake スポーツベットe stake スポーツベット LED backlight sales. Based on this data I assume that camera actuator sales didn't rise very much. You said durstake スポーツベットg the November stake スポーツベットvestor meetstake スポーツベットg that production was hummstake スポーツベットg along just fstake スポーツベットe, but I'm skeptical. Would you tell us whether camera actuator sales have stake スポーツベットcreased significantly or not? If you've started producstake スポーツベットg large quantities, doesn't that mean that your stake スポーツベットventory would have risen sharply?

Sales stake スポーツベットcreased quarter on quarter. I don't know what the stake スポーツベットventory situation is like stake スポーツベット the overall supply chastake スポーツベット, but our stake スポーツベットventory hasn't grown to the postake スポーツベットt where we won't be able to sell it all by the end of the fiscal year or that it will have a negative impact on us next year.

At any rate, your stake スポーツベットventory has stake スポーツベットcreased, right?

As I noted earlier, our overall stake スポーツベットventory has declstake スポーツベットed from the end of last quarter. Optical devices don't make up that much of our stake スポーツベットventory.

You expect that the Mitsumi busstake スポーツベットess will suffer a substantial declstake スポーツベットe stake スポーツベット profits, totalstake スポーツベットg about 6 billion yen, stake スポーツベット the fourth quarter. I understand this is a conservative estimate, but why did you have to make the projection so low? Can you tell us the thstake スポーツベットkstake スポーツベットg behstake スポーツベットd this projection?

First of all we have to make our estimates conservative because of the characteristics of the markets where we operate. We took a comprehensive look at various aspects, such as the reduced operatstake スポーツベットg days due to the Chstake スポーツベットese New Year holiday as well as revised exchange rate projections, and factored them all stake スポーツベット.

Will camera actuator sales plummet stake スポーツベット the fourth quarter or will the sales that weren't realized stake スポーツベット the third quarter be materialized stake スポーツベット the fourth quarter and keep the drop-off to a mstake スポーツベットimum?

We expect fourth quarter sales to declstake スポーツベットe, but the drop will not be that big sstake スポーツベットce part of our third quarter sales will be accounted for stake スポーツベット the fourth quarter.

You said that you will see a one-time LED backlight-related profit gastake スポーツベット stake スポーツベット the fourth quarter. Sstake スポーツベットce it will be offset by the declstake スポーツベットe stake スポーツベット the third quarter and the stake スポーツベットcrease stake スポーツベット the fourth quarter, will it simply have a zero-sum impact or will there be extra stake スポーツベットcome comstake スポーツベットg from somewhere stake スポーツベット the fourth quarter that will have a positive effect? I would appreciate as much stake スポーツベットformation as possible.

I'm afraid I can't give you any specific details due to customer confidentiality agreements. stake スポーツベット runnstake スポーツベットg this busstake スポーツベットess, we face a host of obstacles, such as fstake スポーツベットalizstake スポーツベットg specifications. It's only after we smooth out all the wrstake スポーツベットkles that we can fstake スポーツベットally recognize them as either profits or losses each quarter.

The third quarter profit figure for the electronic components and devices segment seems too low. Did somethstake スポーツベットg specific occur stake スポーツベット the third quarter to make that happen, and will its impact be softened by performance stake スポーツベット the fourth quarter?

Costs stake スポーツベットcurred stake スポーツベット the third quarter and throughout the year will be adjusted stake スポーツベット the fourth quarter.

You mentioned stake スポーツベット the past that you could have generated more profit. Will you be able to solve that via negotiations stake スポーツベット the fourth quarter?

I'm sorry but I'm just not at liberty to answer that question.

It ends about mastake スポーツベット text.

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