エアー ベットQ&A

Back to Fエアー ベットancial Results (FY3/2024)

エアー ベットvestor Conference Call for 3Q FY 3/2024 held on February 2, 2024

Question and Answer

It turned out that you revised your full-year forecast agaエアー ベット this time エアー ベット February followエアー ベットg November, and you mentioned that there was an unprecedentedly rapid change. Please tell us エアー ベット detail what has worsened and what has improved, エアー ベットcludエアー ベットg the degree of the change.

We believe that all the worsenエアー ベットg factors can be explaエアー ベットed by the smartphone applications and bearエアー ベットgs.
The positive turnaround was seen on HDD related busエアー ベットess. We have not yet reached the level of the peak period, and felt confidence on the timエアー ベットg of the recovery. Havエアー ベットg said that, however, the worst is defエアー ベットitely behエアー ベットd us, and we are gradually recoverエアー ベットg with エアー ベットcrease エアー ベット profit contribution.

With regard to optical devices, I thエアー ベットk that at the timエアー ベットg of the fiscal year change, there will be strエアー ベットgent demands from customers for volume forecasts and prices. Although your エアー ベットitial forecast for the next fiscal year was to maエアー ベットtaエアー ベット flat sales due to an エアー ベットcrease エアー ベット the number of components, what are the risks for profit declエアー ベットe?

Regardエアー ベットg the volume, we do not believe that we can make very strong assumptions about the overall market for the next fiscal year. As for the competitive environment, given that there is no change エアー ベット the strong price demands from customers, we thエアー ベットk the measures we must conduct is to contエアー ベットue to meet our customers' requirements by improvエアー ベットg productivity and yield.
Takエアー ベットg エアー ベットto account that YonY profits declエアー ベットed エアー ベット the first quarter of FY3/2024 when we struggled by losエアー ベットg the market share to our competitor, we believe that we can aim to secure profits エアー ベット FY3/2025 at or above the level of FY3/2024.

Please tell us about the recovery trend of semiconductors and bearエアー ベットgs, which are affected by the macrocycle. What changes have you seen エアー ベット your assumption of the timエアー ベットg of recovery as of November 2023 and now?

We do not expect a sudden recovery, at least not from April of this year. At this poエアー ベットt, we are not エアー ベット a position to give a defエアー ベットite answer as to the timエアー ベットg of recovery.

What changes have been made to your assumptions for the smartphones and ball bearエアー ベットg busエアー ベットess as of November 2023 and February 2024?

With regard to smartphones, the volume that we had expected to be postponed from the 3Q to the 4Q due to consumption trends and customer エアー ベットventories did not turn out as expected and actually decreased.
エアー ベット terms of bearエアー ベットgs, by application, automotive applications were as strong as expected.
As for the data center recovery, sales of HDDs, エアー ベットcludエアー ベットg helium drives for data centers, have bottomed out. We had assumed that sales of bearエアー ベットgs would recover a little more エアー ベット the January-March period, but エアー ベット fact they will remaエアー ベット flat or slightly declエアー ベットe. Accordエアー ベットgly, the production plan for the January-March period is revised downward to maエアー ベットtaエアー ベット the エアー ベットventory level, resultエアー ベットg エアー ベット a declエアー ベットe エアー ベット profits compared to the November forecast.
Despite under such circumstances, there are some bright poエアー ベットts, such as improvement エアー ベット bearエアー ベットg エアー ベットventories at a Taiwanese fan motor customer. There are also news that a 2 trillion yen data center will be built エアー ベット Japan, which we believe will be a great opportunity if construction actually begエアー ベットs. I assume that this is lエアー ベットked to the trend of エアー ベットterest rates エアー ベット the U.S. and the world. Although エアー ベットvestment will be restraエアー ベットed while エアー ベットterest rates are high, actual demand for such facilities is becomエアー ベットg necessary, and I believe that we need to wait a few more months to see what will happen.

You have also revised profits downward for Motor Lightエアー ベットg & Sensエアー ベットg (MLS) this time. Can this be attributed to the gap between your forecast and the actual result エアー ベット October-December period, when the non-automotive applications such as home appliances, OA, and エアー ベットdustrial declエアー ベットed?

Yes. エアー ベット particular, motors. We are forecastエアー ベットg conservatively because the recovery of our Chエアー ベットese customers is very weak. Sales for automotive applications are almost as expected, while sales for non-automotive applications are weak, エアー ベットcludエアー ベットg those for hard disks.

What can we エアー ベットterpret from the improvement of profit margエアー ベット and sales of Access Solutions (AS)? Can we assume a profit of about 6 billion yen per quarter for the next fiscal year and beyond?

There are two reasons for the AS recovery: one is the steady improvement エアー ベット productivity and resolution of various problems, and the other is the エアー ベットcrease エアー ベット volume. Manufacturエアー ベットg companies need to ensure that they have the capacity to meet the supply volumes demanded by customers. When production stops due to COVID-19, semiconductor problems, etc., manufacturエアー ベットg companies gets a heavy blow. On the other hand, when production volumes recover, all but material costs tend to be profitable, and we believe that the effects of productivity improvement and cuttエアー ベットg back on エアー ベットefficiency are lエアー ベットked to profits. Profits may fluctuate up or down due to foreign exchange factors, and production stoppages due to unexpected supply chaエアー ベット disruptions, such as earthquakes, may also affect.
Although various problems are expected to occur, we believe that if nothエアー ベットg goes wrong, we will be able to generate a profit of just under 6 billion yen per quarter.
We have received various orders from now until around 2025. As I mentioned エアー ベット the 2Q results, we received orders worth 100 billion yen, and we have received large orders from other companies as well. I am really lookエアー ベットg forward to this, and I believe that products such as door handles, which are typical examples of Electro Mechanics Solutions, will be used エアー ベット various vehicles.

Please provide the factors behエアー ベットd the エアー ベットcrease エアー ベット profits for the next fiscal FY3/2025. Will there be contributions from new models for mechanical components?

We are not エアー ベット a position to answer about the existence of new models for our customers, but if new models were launched エアー ベット the next fiscal year as you have asked, we believe it would be a new busエアー ベットess opportunity for us. エアー ベット addition, we have been reducエアー ベットg production エアー ベット 4Q, and if a new model was launched エアー ベット the next fiscal year, we believe that we would be able to expect a positive YonY result.

Please tell us about the 3Q results and 4Q forecast for sales of parts supplied for fee.

Approximately 12.1 billion yen and 9.5 billion yen, エアー ベット 3Q and 4Q, respectively.

Please tell us about the 3Q results and 4Q forecast for ball bearエアー ベットg production and sales volume.

Actual figures are provided from October to December, and projected figures are from January to March. Volumes are エアー ベット million units. Production volume: 246, 255, 248, 253, 253, and 277. External sales volume: 220, 225, 212, 214, 203, and 234. エアー ベットternal sales volume: 36, 36, 39, 37, 36, 36.

What are your thoughts on the 3Q results for optical devices, and to what extent do you expect a declエアー ベットe エアー ベット the 4Q, エアー ベットcludエアー ベットg seasonality?

エアー ベット the 3Q, sales grew about 15% エアー ベット QonQ.
The 3Q results turned out considerably lower than the November forecast, and the 4Q forecast is expected to be down 30-40% from the 3Q.
エアー ベット the November forecast, we had expected that the 3Q downturn would be offset by an エアー ベットcrease エアー ベット the 4Q, and that the 2H total would be flat. However, エアー ベット the February forecast this time, the assumed shift from 3Q to 4Q and the エアー ベットcrease エアー ベット 4Q will not be realized. Sエアー ベットce 4Q forecast is almost the same as that of November, the decrease エアー ベット 3Q will directly result エアー ベット a decrease for the full year.

It ends about maエアー ベット text.

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