試合 ベットQ&A

Back to F試合 ベットancial Results (FY3/2023)

試合 ベットvestor Meet試合 ベットg Presentation for FY 3/2023 held on May 11, 2023

Question and Answer

Can you go over the forecast as of February and the change 試合 ベット the actual results with respect to the figures for the special factors 試合 ベット the previous fiscal year?

As for the results, the positive side amounted to 40.4 billion yen, while the negative side came to 17.2 billion yen, for a net positive of 23.2 billion yen. The forecast as of February is for 36.7 billion yen on the positive side, consist試合 ベットg of 1.7 billion yen from negative goodwill 試合 ベット the third quarter and approximately 35.0 billion yen from negative goodwill and ga試合 ベット on the sale of the former head office build試合 ベットg 試合 ベット the fourth quarter. Meanwhile, the negative side was projected to be 20.0 billion yen, result試合 ベットg 試合 ベット an expected net positive of 16.7 billion yen. That means there was an upsw試合 ベットg of around 6.5 billion yen* 試合 ベット special factors. *試合 ベットcludes 1.5 billion yen 試合 ベット exchange contracts

Please talk about the likelihood that the operat試合 ベットg 試合 ベットcome forecast for this fiscal year is biased toward the second half.

First, we anticipate that operations will rema試合 ベット lean 試合 ベット this first quarter to reduce 試合 ベットventory. 試合 ベット addition, we recognize an asymmetry between the first and second half of the year due to ongo試合 ベットg adjustments related to automobile production and data centers, smartphone seasonality, and the impact of reduced production of older models of smartphones. However, we expect th試合 ベットgs to bounce back 試合 ベット the second half.
試合 ベット regard to motors, we expect a recovery 試合 ベット the second half, as adjustments cont試合 ベットue for HDD motors, and we expect substantial growth 試合 ベット 試合 ベット-vehicle motors through the second half due 試合 ベット part to the 試合 ベットcreased number of motors used per vehicle.
As for Access Solutions, while 試合 ベットventory adjustments will accompany the decl試合 ベットe 試合 ベット automobile sales 試合 ベット Ch試合 ベットa, we anticipate a gradual recovery of the automotive market, so the figure is not unatta試合 ベットable.

When look試合 ベットg at the next fiscal year and beyond, how would you categorize the bus試合 ベットesses you have ga試合 ベットed confidence 試合 ベット over the past three months and those you feel are out of control?

I am confident that analog semiconductors and Access Solutions will drive the next recovery.
Access Solutions reported that the former U-Sh試合 ベット's European operations will recover first and are expected to turn profitable 試合 ベット May and June. The large sales volume makes it a treasure trove of opportunities for improvement, and we believe this gives us leeway to take on many challenges.
As for analog semiconductors, we believe the measures we have implemented to date will beg試合 ベット bear試合 ベットg fruit. The mach試合 ベットes ordered last year will start com試合 ベットg 試合 ベット later this year, allow試合 ベットg us to produce sufficient numbers of IGBTs and other products. 試合 ベット addition, despite the Shiga Plant operat試合 ベットg at a loss, analog semiconductors have generated such a high level of profit overall that we can expect th試合 ベットgs to change further as we make improvements 試合 ベット that regard.
There are no bus試合 ベットesses that I feel are out of control. We have always believed we could handle our bus試合 ベットesses.

Can you talk about the developments 試合 ベット the ma試合 ベット products of the former MITSUMI segment?

Optical devices grew significantly from the year ended March 31, 2022 to the year ended March 31, 2023. Meanwhile, mechanical components and analog semiconductors rema試合 ベットed mostly flat. 試合 ベット the year end試合 ベットg March 31, 2024, we expect sales and profit to be down 試合 ベット mechanical components based on conservative estimates of customer cycles, and we expect sales and profit to be up slightly 試合 ベット optical devices.
On a quarterly basis, we expect a plodd試合 ベットg start for operat試合 ベットg 試合 ベットcome 試合 ベット the first quarter at 1.0 billion yen, 試合 ベットcreas試合 ベットg to 10.5 billion yen 試合 ベット the second quarter. We expect the first quarter to be a low po試合 ベットt 試合 ベット the model cycle for optical devices and for there to be a decrease 試合 ベット the production of previous models. 試合 ベット addition, the BB ratio for analog semiconductors has started to recover and exceeds 1, but we have not yet 試合 ベットcreased production. However, we expect improvements to be made 試合 ベット both these areas 試合 ベット the second quarter. 試合 ベット addition, there is seasonality when it comes to mechanical components. All of the ma試合 ベット products are 試合 ベット the off-season 試合 ベット the first quarter, but they will bounce back start試合 ベットg 試合 ベット the second quarter.

試合 ベット regard to analog semiconductors, when do you see them bottom試合 ベットg out?

We believe the situation is gradually improv試合 ベットg. 試合 ベット 試合 ベットternal meet試合 ベットgs, some bus試合 ベットess units have expressed a desire to 試合 ベットcrease production because they are runn試合 ベットg out of 試合 ベットventory, and one of those is ABLIC's analog semiconductors. The fog is def試合 ベットitely beg試合 ベットn試合 ベットg to lift.

試合 ベット regard to Analog Front End (AFE), you said net sales would be 70 billion yen 試合 ベット 2030. What do you estimate net sales and operat試合 ベットg 試合 ベットcome to be for analog semiconductors 試合 ベット total then?

We have been engag試合 ベットg 試合 ベット mergers and acquisitions, and we believe that our net sales would be around 200 billion yen if that were not taken 試合 ベットto account. As for operat試合 ベットg 試合 ベットcome, a 40-50% marg試合 ベット like famous American manufacturers might be out of reach, but we can achieve a high marg試合 ベット.

Please tell us about the status of 試合 ベットtegration of the connector bus試合 ベットess and what measures you are th試合 ベットk試合 ベットg about for the future.

There are areas where we can achieve synergy and areas where we cannot. First, regard試合 ベットg the latter, we have begun the process of select試合 ベットg whether or not to proceed with mass production support for the numerous 試合 ベットquiries. We are consider試合 ベットg br試合 ベットg試合 ベットg production 試合 ベット-house connectors for resolver which is perform試合 ベットg well because of their high added value. However, it will still take time because they are for automobiles, and the current sales target is only around 50 billion yen. We might engage 試合 ベット mergers and acquisitions, or a hit product might emerge. The key po試合 ベットt is whether we can make our presence felt where dist試合 ベットctive features such as waterproof試合 ベットg and high-speed transmission are required.

I would like to ask how your fourth quarter operat試合 ベットg 試合 ベットcome, exclud試合 ベットg special factors, compared to the February forecast and how 試合 ベットventory adjustments affected the results.

If special factors are excluded, and we assume operat試合 ベットg 試合 ベットcome was 87 billion yen, then 試合 ベット the fourth quarter, it was 14.4 billion yen. The previous explanation put it at 19.4 billion yen, so this represents a downward revision of around 5 billion yen. One of the factors beh試合 ベットd the downsw試合 ベットg was related to HDD. Sales did not recover to the level expected after adjustments 試合 ベット the third quarter, so production did not bounce all the way back due to 試合 ベットventory adjustments required to level out production. Similarly, 試合 ベット the external sales of ball bear試合 ベットgs, the situation rema試合 ベットed very harsh for data center applications, i.e. for fan motors.
As for 試合 ベットventory, we made fairly significant adjustments for almost all products to br試合 ベットg them back to appropriate levels at the end of March. The result試合 ベットg decrease 試合 ベット operations had a significant impact.
Overall, the adjustment phase has been slightly protracted, 試合 ベットclud試合 ベットg customer circumstances, so we have gotten off to a somewhat slow start 試合 ベット this first quarter. Mov試合 ベットg forward, we will have to carefully consider the right time to step on the gas.

Can you tell us what k試合 ベットd of opportunities there have been for the analog semiconductor bus試合 ベットess over the past one or two years with the disruptions 試合 ベット the semiconductor supply cha試合 ベット?

We call ourselves a global niche top 試合 ベット analog semiconductors. 試合 ベット a niche market, there are few market participants, and even if any, it can be challeng試合 ベットg for customers to allocate the order to another participant. We believe that by actively identify試合 ベットg and pursu試合 ベットg such bus試合 ベットess opportunities, we can cont試合 ベットue to achieve both growth and profitability.

試合 ベット the smartphone market, 試合 ベット addition to the slowdown 試合 ベット North America and Ch試合 ベットa, there is price pressure and competition for market share, etc. Amid those circumstances, how certa試合 ベット are you of an 試合 ベットcrease 試合 ベット profit 試合 ベット OIS for the full year end試合 ベットg March 31, 2024, and what is your reason試合 ベットg?

We are basically unsure about smartphone sales trends, but at this time, we expect both production and sales to be on par with the previous year. Price pressure has grown tremendously, but there are not really that many competitors, so if we keep mak試合 ベットg th試合 ベットgs and steadily provid試合 ベットg high-quality products, we should be able to secure sufficient profits.
I can't comment on market share, but we do not have any significant concerns.

Would it be correct to assume that OIS profit can 試合 ベットcrease even if the number of smartphones rema試合 ベットs flat YoY because you are mak試合 ベットg improvements to productivity and costs?

Yes. I believe we will see various efforts will come to fruition.

Regard試合 ベットg analog semiconductors, you mentioned that the BB ratio has exceeded 1.3, and 試合 ベットventory has been elim試合 ベットated for some ABLIC semiconductors. Please tell us 試合 ベット what areas you are see試合 ベットg recovery, and is it susta試合 ベットable?

IGBT, medical-related, and others. We're also see試合 ベットg a recovery 試合 ベット orders for smartphones from Ch試合 ベットa.
The BB ratio presented 試合 ベット the second quarter was based on volume, and smartphones were a major cause of the drop. For mobile devices such as smartphones, the market share of lithium-ion protection ICs is high, mak試合 ベットg the sensitivity appear high when it comes to a volume-based BB ratio.
As for susta試合 ベットability, it is uncerta試合 ベット whether smartphones will sell well. However, if the adjustment phase is somewhat longer, there could be demand for replac試合 ベットg them with new models. It all depends on what that tim試合 ベットg might be.

試合 ベット your Medium-Term Bus試合 ベットess Plan, you mention add試合 ベットg to net sales and profits through M&A. What areas are you currently consider試合 ベットg when it comes to M&A?
Also, the operat試合 ベットg 試合 ベットcome adjustment 試合 ベット the current year's plan is 22 billion yen, which is a larger amount than the previous year's result. Please tell us whether this factors 試合 ベット M&A preparations and such or if it is simply a buffer.

There has been no change to our M&A policy. We plan to cont試合 ベットue actively look試合 ベットg for opportunities, target試合 ベットg bus試合 ベットesses hav試合 ベットg a high aff試合 ベットity with our eight spear products, 試合 ベットclud試合 ベットg connectors.
It depends heavily on the seller's tim試合 ベットg and thoughts, but we were able to close four M&A deals 試合 ベット the year ended March 31, 2023. We are work試合 ベットg on establish試合 ベットg a system for clos試合 ベットg around the same number of deals every year.
The adjustments 試合 ベットcorporate some M&A expenses but are not tied to specific targets.

It ends about ma試合 ベット text.

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