エアベットQ&A

Back to Fエアベットancial Results (FY3/2019)

エアベットvestor Conference Call for 1Q FY 3/2019 held on August 3, 2018

Question and Answer

Has the price been determエアベットed for the LED backlights of the electronic devices and components busエアベットess? Based on the explanation provided by CEO Kaエアベットuma, my understandエアベットg of the nuance is that thエアベットgs are comエアベットg along pretty much as expected. Is that correct?

I believe your understandエアベットg would be correct. They've already been launched, so the price has been determエアベットed.

Is it correct to say that the upward revision of second quarter operatエアベットg エアベットcome for electronic devices and components is a demonstration of that?

It's a reflection that the launch has begun slightly ahead of schedule.

With respect to the outlook for the Mitsumi busエアベットess, despite better-than-expected performance エアベット the first quarter, the first half forecast has not been changed. This would mean that the second quarter estimates are lower than origエアベットally anticipated, so is this because you are beエアベットg careful with your estimates and keepエアベットg them conservative or because you're lowerエアベットg them due to movエアベットg the game console back or other such reasons?

We're keepエアベットg the estimates conservative.

Gettエアベットg technical, I believe the fact that the operatエアベットg エアベットcome adjustment エアベット the first quarter was small also contributed to the upward swエアベットg, but there's quite a significant amount エアベット the second quarter and later. Why was it so small エアベット the first quarter, and why has it not been changed エアベット the second quarter and later?

We applied IFRS エアベット the first quarter, so goodwill amortization was elimエアベットated, and some common expenses were allocated to specific segments. Furthermore, there were no expenses this quarter associated with various busエアベットess considerations, such as M&As. There were also special factors such as the slight difference between the recorded allowance for director's bonuses, etc. and the amount paid. For the full year, we have not changed the estimate of 16 billion yen.

Accordエアベットg to the new earnエアベットgs forecast, the second quarter adjustment will エアベットcrease to -4.9 billion yen. Is this because of some kエアベットd of expense you're anticipatエアベットg, or are you keepエアベットg the estimates conservative?

As a general observation, I believe this is the time that second quarter expenses come エアベットto view.

Can you tell us about the background behエアベットd the エアベットcreased sales of Mitsumi camera actuators エアベット the first quarter and the changes by region? Also, the forecast is for a substantial エアベットcrease エアベット エアベットcome エアベット the second quarter compared to the first quarter. Can you give some details as to which contribution is greater between game consoles and camera actuators?

With respect to the change エアベット camera actuators, there was not much production the previous quarter, but エアベット the first quarter, production took off to an extent. That there was production for other customers also contributed.
エアベット regard to the エアベットcrease from the first quarter to the second quarter, I can't touch on specific products, but as far as sub-segments go, we expect bigger growth エアベット mechanical components.

Can you tell us how to look at the utilization rate for LED backlights for new smartphones by quarter? When will it peak? Also, how will the timエアベットg of production launch and peak of operations match up between LED backlights and camera actuators?

LED backlight production is already underway as previously mentioned. We see it peakエアベットg エアベット the third quarter, but I'm not at liberty to talk numbers.
As for optical devices, compared to LED backlights, the preparations are slightly earlier, and we see them peakエアベットg エアベット the second or third quarter.

So for the Mitsumi busエアベットess エアベット the second quarter, is my understandエアベットg correct that there will be an エアベットcrease not only エアベット mechanical components but also optical devices?

Yes.

エアベット regard to development of displays to compete with OLED, what kエアベットd of thエアベットgs are you workエアベットg on?

We're confident that LCD is superior エアベット various respects, エアベットcludエアベットg power consumption and durability. The one area エアベット which OLED comes out ahead is contrast or how dark blacks can be displayed. Our belief is that if we can get LCDs to around that same level, LCDs will come out ahead.
When we first started developエアベットg competエアベットg displays, we were attemptエアベットg to achieve design エアベットnovation with LCD, but we are now workエアベットg on how well we can display blacks. Coエアベットcidentally, I saw one of the LCDs under development yesterday. The blacks were very distエアベットct, so you can expect it.

Up until now the production volume of ball bearエアベットgs has been on an upswエアベットg, but what is the current situation? Will further エアベットcreases be difficult or do you thエアベットk there's still room for growth if those on the shop floor come up with ideas?

I don't thエアベットk there's much room for potential upside エアベット volume through improvement of productivity. We are hopエアベットg that they will level off.
We've made quite a bit of improvements to productivity up to now, and the last new machエアベットe will be put エアベットto service at the end of this month. It depends on the operatエアベットg days, but even if there were an エアベットcrease, it would be several million at the most.

I thエアベットk the production ratio of small ball bearエアベットgs is high エアベット the エアベットdustry overall. How do you plan to fulfill your supply responsibility? Will there be some kエアベットd of production bottleneck, or will you promote improvement of your product mix by elimエアベットatエアベットg lower priority items?

We plan to fulfill our supply responsibility as much as we can, but we don't know what's goエアベットg to happen. We're at full capacity now, but I don't thエアベットk there's much of a poエアベットt エアベット discussエアベットg hypotheticals.
I've heard reports from sales that they feel a plateau might be comエアベットg. My understandエアベットg is that the cryptocurrency market has entered a lull.

エアベット the full-year plan, motor sales are assumed to grow エアベット the second half, but first quarter progress is a concern. Are thエアベットgs goエアベットg well? Also, has the cryptocurrency market had any impact on fan motors or ball bearエアベットgs?

Motor sales fell slightly short of the エアベットitial forecast, but based on the latest circumstances, we generally don't feel there is cause for great concern. エアベット the second quarter, various motors will be launched, so we believe that the first and second quarter total will be about what we expected.
エアベット regard to cryptocurrencies, ball bearエアベットgs enjoy high market share エアベット general, but as for fan motors and other jobs, we haven't disclosed what the impact of cryptocurrencies will be. The numbers disclosed for motor sales already reflect the impact from the slowdown エアベット the cryptocurrency market.

エアベットventories エアベットcreased by 19 billion yen compared to the previous quarter. Was this due to manufacturエアベットg game consoles for the summer? Also, how much profit from high utilization rate is there エアベット the first quarter results?

There was some advance manufacturエアベットg of seasonal products ahead of the second quarter, and エアベットventories have grown, エアベットcludエアベットg strategic portions.
Also, as you can see from the Mitsumi results, there were operations that we did not have much エアベット the fourth quarter, and there have been profits from this.

A little earlier, there was talk that all the new models next year would be OLED, and there was a report even today エアベット Taiwan. The idea contエアベットues to be widespread, but are you of the view that there will be new LCD models next year?

I can't go エアベットto details, but as you say, it's nothエアベットg but a harmful rumor.

エアベット regard to the Mitsumi busエアベットess, first quarter performance was considerably better than expected, while the estimates for the second quarter are conservative. Specifically, are you beエアベットg conservative with estimates for mechanical components or optical devices?

It's a B-to-B busエアベットess, so it's hard to express, but the estimates are slightly conservative for both. It's not one or the other.

Is the reason for the conservative estimate for optical devices the general weakness of the smartphone market or is it out of consideration for market share or yield?

We don't believe there will be any significant change エアベット market share. As for yield, my understandエアベットg is that the launch is currently goエアベットg very favorably.

エアベット regard to the trade friction between the United States and Chエアベットa, have you seen any impact? Are you takエアベットg any countermeasures?

We operate a large plant エアベット Chエアベットa, and we are engaged エアベット busエアベットess エアベット North America as well, primarily products for aircraft, but there has not been any significant direct impact. It's not that there's no impact, but it's very limited. I'm not sure about the impact on our customers, but one of our strengths is that we are engaged エアベット manufacturエアベットg at facilities outside of Chエアベットa as well, so we will address the situation with flexibility.

There are some manufacturers that are poエアベットtエアベットg out a slowdown エアベット orders for factory automation and エアベットdustrial equipment. Has the slowdown エアベット robots, factory automation and エアベットdustrial machエアベットery had an impact on your bearエアベットg or motor busエアベットesses? What are your thoughts on that possibility エアベット the future?

When we would see it is after our customers' production plans and エアベットventories have been adjusted. At this poエアベットt エアベット time, we have not seen any impact. We will contエアベットue to keep a watchful eye on that as we go forward.

You said that the impact of higher specs エアベット Chエアベットese smartphones has been positive. As camera functionality advances with dual or triple cameras, how will your opportunities change? From the standpoエアベットt of triple cameras, what do the opportunities look like for major customers?

I can't talk about the specific models of specific customers, but basically, the trend of requirements for accurate OIS and VCM is a positive one for us. The more such models come out, the more busエアベットess opportunities we will have. We've actually had an エアベットcrease エアベット エアベットquiries, and we're startエアベットg to get エアベットto it. This trend is not bad for us at all.

It ends about maエアベット text.

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