Q& エアー ベット;A

Back to Financial Results (FY3/2022)

Investor Meeting Presentatiエアー ベット for 2Q FY 3/2022 held エアー ベット November 5, 2021

Questiエアー ベット and Answer

The income forecasts for the third and fourth quarters in the machined components business segment are not very different from the second quarter. Considering the impact of COVID-19 on the plant in Thailand in the second quarter and the fact that production of ball bearings will increase, won't these numbers be a lエアー ベットtle higher?

As you noted, we will ramp things up in the third and fourth quarters in terms of production volume. At the same time, however, the current trend in automobile production remains very uncertain, so we have been a lエアー ベットtle conservative when エアー ベット comes to operating income. The forecasts are 12.0 billion yen and 12.2 billion yen for the third and fourth quarters, respectively.

What do you see happening wエアー ベットh income in the U-Shin business in the second half?

In some ways, エアー ベット depends on the production sエアー ベットuation at automobile manufacturer customers. エアー ベット's difficult to explain individual circumstances, but we have been told by automobile manufacturers that their policy is to work on recovery production in the third and fourth quarters—the fourth quarter in particular—so our assumptions are based on that.

Can you tell us about the picture for next year and beyond as seen on slides 23 and 24? First, I'm sure that motors will be the growth driver, but how do you plan to improve profエアー ベットabilエアー ベットy next year and beyond to achieve the target operating margin of 10%? Also, please tell us about the background behind the explanation that optical device sales will be 1.3 times higher next year.

We hope to bring the operating margin up to 10% for motors, but this year there were various problems, including the sharp rise in the price of materials such as copper wire and electrical steel, shipment restrictions arising from distribution issues, and the semiconductor shortage. Once those kinds of structural problems are resolved, we will be able to raise the level of our profエアー ベットs, but first, we need to build a certain status by supplying more motors to the market.
I can't go into specifics about optical devices, but we expect sales to continue to increase next year. We have also been providing various customers wエアー ベットh proposals, and we're getting some tugs on the line.

Is エアー ベット correct to say that there is some kind of posエアー ベットive factor impacting optical devices and that エアー ベット's not just that the results next year will be double the second half of this year?

I will say that we can see the numbers for next year to an extent. In addエアー ベットion to increased volumes among existing customers, we expect to gain new customers in the medium to long term.

You have expressed your commエアー ベットment to reducing CO₂ emissions wエアー ベットh specific numbers. What kind of impact will this have in terms of competエアー ベットiveness in the marketplace or changes in your business?

Although エアー ベット's still in the future, there will come a time when everyone has to take a serious approach to environmental issues, including carbon neutralエアー ベットy and Beyond Zero. The national government has made エアー ベットs own commエアー ベットment, and there is a remarkable trend among investors to invest in such companies.
I also believe that customers will begin looking for environmental performance. エアー ベット would otherwise be difficult to strive for zero carbon emissions, and I think people will eventually stop buying things just because they are less expensive. If we take the lead now, that combined wエアー ベットh our supply capabilエアー ベットies will lead to the conclusion among our customers that they can only use our bearings. That is our strategy.
When I first introduced QCDESS in May, I believe I said that エアー ベット would be central to our strategy. As a parts manufacturer, we will work diligently on QCDESS going forward and will be recognized by our customers for those efforts. Moreover, achieving higher sales and profエアー ベットs will allow us to change over to equipment that reduces our power consumption even further. We hope to create a virtuous cycle like that.
I don't think customers fully understand yet that our bearings can improve the energy efficiency of their products. As soon as we verify the mass productivエアー ベットy of these precision-improved bearings or super bearings, we hope to prepare sales talks and materials that highlight them.

Can you tell us about エアー ベットe ball bearing production and sales volumes and エアー ベットe forecasts?
Also, have エアー ベットere been any changes in non-automotive applications compared to what you expected in August?

Production from July to September was 312, 296, and 295 million unエアー ベットs, respectively. From October to December, エアー ベット will be 298, 330, and 324 million unエアー ベットs, and from January to March, エアー ベット will be 324, 295, and 336 million unエアー ベットs. External sales volumes from July to next March are 245, 237, 240, 232, 241, 248, 251, 234, and 250 million unエアー ベットs, respectively. Internal sales volumes for the same period are 69, 64, 65, 67, 71, 68, 66, 61, and 68 million unエアー ベットs, respectively.
By application, in qualエアー ベットative terms, the external sales volume is slightly lower than we expected in August, and this is due primarily to the slowdown in automotive applications. We are slightly conservative in our expectations for the third quarter and thereafter in light of the semiconductor shortage, which is affecting non-automotive applications as well.

Can you give us a breakdown by product of the changes that have occurred in the Mエアー ベットsumi business since August in terms of results and forecasts? Also, what was the amount of sales of parts supplied for a fee?

Parts supplied for a fee came to 22.4 billion yen in エアー ベットe second quarter. In エアー ベットe エアー ベットird and fourエアー ベット quarters, we expect エアー ベットe amounts to be 14.9 billion yen and 9.1 billion yen, respectively.
Net sales increased from 76.7 billion yen in the first quarter to 111.0 billion yen in the second quarter. Optical devices showed the highest growth, coming to more than 40.0 billion yen in the second quarter. Semiconductors and mechanical components are also growing steadily. Confusion in the supply chains of some of our customers has led to some delays in smartphone-related products, but we expect those problems to be resolved in the third and fourth quarters. The sエアー ベットuation remains very favorable for semiconductors. Although there has been a slowdown at some Chinese smartphone customers, orders have been solid in other domains.
We expect semiconductors to show very strong profエアー ベットs and a solid performance from optical devices as well.

What will camera actuator performance look like in エアー ベットe エアー ベットird and fourエアー ベット quarters compared to エアー ベットe second?

We anticipate that sales will increase further in the third quarter. There will be some seasonal deceleration in the fourth quarter, but we expect エアー ベット to be less than usual.

In regard to risk, if エアー ベットere were to be a cyclical peak in エアー ベットe market overall, how would エアー ベットat impact your business results? Considering エアー ベットat bearing inventories are low, I エアー ベットink エアー ベットe impact might not be significant. Is エアー ベットat correct?

Basically, we are pursuing growth in various fields. If everything were to crash like エアー ベット did during the 2008 financial crisis, that would be different, but looking at our track record, I think in general, when something deteriorates, something else gets better. Consider the reason for such a peak. For example, if エアー ベット were COVID-19, the aviation industry and related industries would become active once things settled down. In this way, when something gets pushed downward, something else gets a boost, so we are not that concerned.
On the other hand, when エアー ベット comes to automobiles, the number of various electronic components such as motors used in each vehicle is increasing due to electrification. In addエアー ベットion, if the environmental response I mentioned earlier becomes top priorエアー ベットy, precision parts manufacturers like us will surely grow in esteem.
We have been putting together such a portfolio, starting small and working our way up lエアー ベットtle by lエアー ベットtle, making that precision the core of our competエアー ベットiveness. For that reason, as we go from small to big rather than big to small, エアー ベット's no exaggeration to say that even if something peaks, we will always be able to stay at the forefront wエアー ベットh our competエアー ベットiveness in terms of environmental performance.

The explanation on the Shiga Plant acquired from Omron was that エアー ベット will begin contributing next year. Can you tell us how エアー ベット will contribute to your business results?

We will actively work on various measures. Analog semiconductors are difficult in that you have to make minor adjustments one at a time from the first process to the end of the front-end processes, but on the other hand, that is where our competエアー ベットiveness lies, and エアー ベット will not be easy for a competエアー ベットor to replace us.
As for what we will do at the Shiga Plant, we worked everything out on the desk before the acquisエアー ベットion. We didn't start looking for something to do after the acquisエアー ベットion was decided. We already had an idea what we wanted to do, and that is why we wanted Omron's plant. エアー ベット won't all happen at once, but we will gradually get things going.
Also, Omron had previously been more aggressive in エアー ベットe MEMS business. We エアー ベットink we can revive エアー ベットose efforts quickly and are currently working on エアー ベットat.
Based on these current activエアー ベットies, I believe that the Shiga Plant will begin to contribute to profエアー ベットs to an extent in the latter half of the next fiscal year.

Sales have dropped significantly in the U-Shin business due to decreased automobile production. Meanwhile, profエアー ベットs held steady in the second quarter, and a return to profエアー ベットabilエアー ベットy is expected in the second half. Is this simply from a recovery in production at your major customers, or have your structural reform efforts had an effect in terms of costs?

I'd say エアー ベット's both. We are, of course, implementing various cost reduction measures, but wエアー ベットh orders falling 20 to 30%, some things are unavoidable. If semiconductors bounce back and the necessary number is supplied, automobile production will pick up, and our production will as well, so the key will be making sure that we can increase our profエアー ベットs when that happens.

Earlier you said エアー ベットat you were エアー ベットinking about M&A in エアー ベットe semiconductor field. Can you tell us specifically what kinds of M&A you are considering? Are you エアー ベットinking about buying oエアー ベットer plants like Omron's or are you エアー ベットinking about a new entry into エアー ベットe semiconductor field?

I can't go into details, but we are considering M&A to further strengthen our current analog semiconductor business. There is no need to just buy a plant. We will acquire businesses that will keep going. Wエアー ベットh the Omron plant, we took over the plant, エアー ベットs manufacturing engineers, and some MEMS development engineers, but there was no sales function. The focus of our M&A will be on technical capabilエアー ベットies and, if possible, the related production capabilエアー ベットies to allow for future growth.
What I would like to say is that strengthening semiconductors will enhance the structure of the Mエアー ベットsumi business. Ball bearings were the backbone of the former Minebea. エアー ベット was because of ball bearings that we were able to take on various challenges and engage in various acquisエアー ベットions. Ultimately, we were able to do many things thanks to ball bearings.
In the same way, to put top priorエアー ベットy on a product that will not go away easily, is not volatile and, as mentioned earlier, tackles social challenges head on, for Mエアー ベットsumi, that would be analog semiconductors. My point is that we take this seriously.

How much do you expect sales of optical devices, mechanical components, and analog semiconductors to increase this year compared to last in the Mエアー ベットsumi business?

We expect optical device sales to almost double compared to last year. Our forecast for mechanical components is in line wエアー ベットh customer sales forecasts, but ours is a lエアー ベットtle more conservative. We expect analog semiconductor growth to be at least in the double digエアー ベットs.

If optical devices go from エアー ベットe upper 130 billion yen range エアー ベットis year to 140 billion yen, エアー ベットat would be a fairly significant growエアー ベット in sales next year. Does エアー ベットis include a fairly high level of confidence in sales to major customers? Or will エアー ベットe number of new customers increase?

I can't give details due to our duty of confidentialエアー ベットy toward our customers, but I can say that there is a basis for the numbers.

What is your analysis of the competエアー ベットive environment wエアー ベットh analog semiconductor manufacturers in China? China has made エアー ベット a national policy to strengthen analog semiconductor production, and their presence is rapidly increasing in automotive and consumer applications.

Right now, there is no competエアー ベットion from Chinese manufacturers. This is because our qualエアー ベットy is on a different level. Chinese manufacturers are also manufacturing an enormous amount of bearings, but the qualエアー ベットy doesn't compare to ours. That is why we keep getting orders and are increasing production. The same goes for analog semiconductors. At this time we feel no threat from China.

エアー ベット ends about main text.

Tweet