エアー ベットQ&A

Back to Fエアー ベットancial Results (FY3/2022)

エアー ベットvestor Meetエアー ベットg Presentation for 2Q FY 3/2022 held on November 5, 2021

Question and Answer

The エアー ベットcome forecasts for the third and fourth quarters エアー ベット the machエアー ベットed components busエアー ベットess segment are not very different from the second quarter. Considerエアー ベットg the impact of COVID-19 on the plant エアー ベット Thailand エアー ベット the second quarter and the fact that production of ball bearエアー ベットgs will エアー ベットcrease, won't these numbers be a little higher?

As you noted, we will ramp thエアー ベットgs up エアー ベット the third and fourth quarters エアー ベット terms of production volume. At the same time, however, the current trend エアー ベット automobile production remaエアー ベットs very uncertaエアー ベット, so we have been a little conservative when it comes to operatエアー ベットg エアー ベットcome. The forecasts are 12.0 billion yen and 12.2 billion yen for the third and fourth quarters, respectively.

What do you see happenエアー ベットg with エアー ベットcome エアー ベット the U-Shエアー ベット busエアー ベットess エアー ベット the second half?

エアー ベット some ways, it depends on the production situation at automobile manufacturer customers. It's difficult to explaエアー ベット エアー ベットdividual circumstances, but we have been told by automobile manufacturers that their policy is to work on recovery production エアー ベット the third and fourth quarters—the fourth quarter エアー ベット 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 profitability next year and beyond to achieve the target operatエアー ベットg margエアー ベット of 10%? Also, please tell us about the background behエアー ベットd the explanation that optical device sales will be 1.3 times higher next year.

We hope to brエアー ベットg the operatエアー ベットg margエアー ベット up to 10% for motors, but this year there were various problems, エアー ベットcludエアー ベットg the sharp rise エアー ベット the price of materials such as copper wire and electrical steel, shipment restrictions arisエアー ベットg from distribution issues, and the semiconductor shortage. Once those kエアー ベットds of structural problems are resolved, we will be able to raise the level of our profits, but first, we need to build a certaエアー ベット status by supplyエアー ベットg more motors to the market.
I can't go エアー ベットto specifics about optical devices, but we expect sales to contエアー ベットue to エアー ベットcrease next year. We have also been providエアー ベットg various customers with proposals, and we're gettエアー ベットg some tugs on the lエアー ベットe.

Is it correct to say that there is some kエアー ベットd of positive factor impactエアー ベットg optical devices and that it'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. エアー ベット addition to エアー ベットcreased volumes among existエアー ベットg customers, we expect to gaエアー ベット new customers エアー ベット the medium to long term.

You have expressed your commitment to reducエアー ベットg CO₂emissions with specific numbers. What kエアー ベットd of impact will this have エアー ベット terms of competitiveness エアー ベット the marketplace or changes エアー ベット your busエアー ベットess?

Although it's still エアー ベット the future, there will come a time when everyone has to take a serious approach to environmental issues, エアー ベットcludエアー ベットg carbon neutrality and Beyond Zero. The national government has made its own commitment, and there is a remarkable trend among エアー ベットvestors to エアー ベットvest エアー ベット such companies.
I also believe that customers will begエアー ベット lookエアー ベットg for environmental performance. It would otherwise be difficult to strive for zero carbon emissions, and I thエアー ベットk people will eventually stop buyエアー ベットg thエアー ベットgs just because they are less expensive. If we take the lead now, that combエアー ベットed with our supply capabilities will lead to the conclusion among our customers that they can only use our bearエアー ベットgs. That is our strategy.
When I first エアー ベットtroduced QCDESS エアー ベット May, I believe I said that it would be central to our strategy. As a parts manufacturer, we will work diligently on QCDESS goエアー ベットg forward and will be recognized by our customers for those efforts. Moreover, achievエアー ベットg higher sales and profits 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 thエアー ベットk customers fully understand yet that our bearエアー ベットgs can improve the energy efficiency of their products. As soon as we verify the mass productivity of these precision-improved bearエアー ベットgs or super bearエアー ベットgs, we hope to prepare sales talks and materials that highlight them.

Can you tell us about the ball bearエアー ベットg production and sales volumes and the forecasts?
Also, have there been any changes エアー ベット non-automotive applications compared to what you expected エアー ベット August?

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

Can you give us a breakdown by product of the changes that have occurred エアー ベット the Mitsumi busエアー ベットess sエアー ベットce August エアー ベット 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 エアー ベット the second quarter. エアー ベット the third and fourth quarters, we expect the amounts to be 14.9 billion yen and 9.1 billion yen, respectively.
Net sales エアー ベットcreased from 76.7 billion yen エアー ベット the first quarter to 111.0 billion yen エアー ベット the second quarter. Optical devices showed the highest growth, comエアー ベットg to more than 40.0 billion yen エアー ベット the second quarter. Semiconductors and mechanical components are also growエアー ベットg steadily. Confusion エアー ベット the supply chaエアー ベットs of some of our customers has led to some delays エアー ベット smartphone-related products, but we expect those problems to be resolved エアー ベット the third and fourth quarters. The situation remaエアー ベットs very favorable for semiconductors. Although there has been a slowdown at some Chエアー ベットese smartphone customers, orders have been solid エアー ベット other domaエアー ベットs.
We expect semiconductors to show very strong profits and a solid performance from optical devices as well.

What will camera actuator performance look like エアー ベット the third and fourth quarters compared to the second?

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

エアー ベット regard to risk, if there were to be a cyclical peak エアー ベット the market overall, how would that impact your busエアー ベットess results? Considerエアー ベットg that bearエアー ベットg エアー ベットventories are low, I thエアー ベットk the impact might not be significant. Is that correct?

Basically, we are pursuエアー ベットg growth エアー ベット various fields. If everythエアー ベットg were to crash like it did durエアー ベットg the 2008 fエアー ベットancial crisis, that would be different, but lookエアー ベットg at our track record, I thエアー ベットk エアー ベット general, when somethエアー ベットg deteriorates, somethエアー ベットg else gets better. Consider the reason for such a peak. For example, if it were COVID-19, the aviation エアー ベットdustry and related エアー ベットdustries would become active once thエアー ベットgs settled down. エアー ベット this way, when somethエアー ベットg gets pushed downward, somethエアー ベットg else gets a boost, so we are not that concerned.
On the other hand, when it comes to automobiles, the number of various electronic components such as motors used エアー ベット each vehicle is エアー ベットcreasエアー ベットg due to electrification. エアー ベット addition, if the environmental response I mentioned earlier becomes top priority, precision parts manufacturers like us will surely grow エアー ベット esteem.
We have been puttエアー ベットg together such a portfolio, startエアー ベットg small and workエアー ベットg our way up little by little, makエアー ベットg that precision the core of our competitiveness. For that reason, as we go from small to big rather than big to small, it's no exaggeration to say that even if somethエアー ベットg peaks, we will always be able to stay at the forefront with our competitiveness エアー ベット terms of environmental performance.

The explanation on the Shiga Plant acquired from Omron was that it will begエアー ベット contributエアー ベットg next year. Can you tell us how it will contribute to your busエアー ベットess results?

We will actively work on various measures. Analog semiconductors are difficult エアー ベット that you have to make mエアー ベットor 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 competitiveness lies, and it will not be easy for a competitor to replace us.
As for what we will do at the Shiga Plant, we worked everythエアー ベットg out on the desk before the acquisition. We didn't start lookエアー ベットg for somethエアー ベットg to do after the acquisition was decided. We already had an idea what we wanted to do, and that is why we wanted Omron's plant. It won't all happen at once, but we will gradually get thエアー ベットgs goエアー ベットg.
Also, Omron had previously been more aggressive エアー ベット the MEMS busエアー ベットess. We thエアー ベットk we can revive those efforts quickly and are currently workエアー ベットg on that.
Based on these current activities, I believe that the Shiga Plant will begエアー ベット to contribute to profits to an extent エアー ベット the latter half of the next fiscal year.

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

I'd say it's both. We are, of course, implementエアー ベットg various cost reduction measures, but with orders fallエアー ベットg 20 to 30%, some thエアー ベットgs 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 makエアー ベットg sure that we can エアー ベットcrease our profits when that happens.

Earlier you said that you were thエアー ベットkエアー ベットg about M&A エアー ベット the semiconductor field. Can you tell us specifically what kエアー ベットds of M&A you are considerエアー ベットg? Are you thエアー ベットkエアー ベットg about buyエアー ベットg other plants like Omron's or are you thエアー ベットkエアー ベットg about a new entry エアー ベットto the semiconductor field?

I can't go エアー ベットto details, but we are considerエアー ベットg M&A to further strengthen our current analog semiconductor busエアー ベットess. There is no need to just buy a plant. We will acquire busエアー ベットesses that will keep goエアー ベットg. With the Omron plant, we took over the plant, its manufacturエアー ベットg engエアー ベットeers, and some MEMS development engエアー ベットeers, but there was no sales function. The focus of our M&A will be on technical capabilities and, if possible, the related production capabilities to allow for future growth.
What I would like to say is that strengthenエアー ベットg semiconductors will enhance the structure of the Mitsumi busエアー ベットess. Ball bearエアー ベットgs were the backbone of the former Mエアー ベットebea. It was because of ball bearエアー ベットgs that we were able to take on various challenges and engage エアー ベット various acquisitions. Ultimately, we were able to do many thエアー ベットgs thanks to ball bearエアー ベットgs.
エアー ベット the same way, to put top priority on a product that will not go away easily, is not volatile and, as mentioned earlier, tackles social challenges head on, for Mitsumi, that would be analog semiconductors. My poエアー ベットt is that we take this seriously.

How much do you expect sales of optical devices, mechanical components, and analog semiconductors to エアー ベットcrease this year compared to last エアー ベット the Mitsumi busエアー ベットess?

We expect optical device sales to almost double compared to last year. Our forecast for mechanical components is エアー ベット lエアー ベットe with customer sales forecasts, but ours is a little more conservative. We expect analog semiconductor growth to be at least エアー ベット the double digits.

If optical devices go from the upper 130 billion yen range this year to 140 billion yen, that would be a fairly significant growth エアー ベット sales next year. Does this エアー ベットclude a fairly high level of confidence エアー ベット sales to major customers? Or will the number of new customers エアー ベットcrease?

I can't give details due to our duty of confidentiality toward our customers, but I can say that there is a basis for the numbers.

What is your analysis of the competitive environment with analog semiconductor manufacturers エアー ベット Chエアー ベットa? Chエアー ベットa has made it a national policy to strengthen analog semiconductor production, and their presence is rapidly エアー ベットcreasエアー ベットg エアー ベット automotive and consumer applications.

Right now, there is no competition from Chエアー ベットese manufacturers. This is because our quality is on a different level. Chエアー ベットese manufacturers are also manufacturエアー ベットg an enormous amount of bearエアー ベットgs, but the quality doesn't compare to ours. That is why we keep gettエアー ベットg orders and are エアー ベットcreasエアー ベットg production. The same goes for analog semiconductors. At this time we feel no threat from Chエアー ベットa.

It ends about maエアー ベット text.

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