Business Results Business Results First Quarter of Fiscal Year First Quarter of Fiscal Year Ending March 31, 2012 Ending March 31, 2012 July 29, 2011 Minebea Co., Ltd. 0
Summary of Consolidated Business Results for 1Q Profits declined due to supply chain disruption by the Tohoku Earthquake, worse product mix, higher wages and higher startup costs from new factories FY ended FY ending Change Mar. '11 Mar. '12 1Q 4Q 1Q YoY QoQ (Millions of yen) Net sales 67,891 63,944 64,802 -4.5% + 1.3% 6,024 4,194 2,303 -61.8% -45.1% Operating income 5,600 3,710 1,870 -66.6% -49.6% Ordinary income 3,815 1,816 668 -82.5% -63.2% Net income Net income per share (yen) 9.99 4.75 1.76 -82.4% -62.9% 1Q of FY 4Q of FY 1Q of FY Foreign exchange rates Mar. ’11 Mar. ’11 Mar. ’12 US$ ¥92.81 ¥81.78 ¥82.04 Euro ¥120.53 ¥110.55 ¥118.54 Thai Baht ¥2.86 ¥2.67 ¥2.72 Chinese RMB ¥13.60 ¥12.39 ¥12.57 July 29, 2011 1 Looking at consolidated business results for the first quarter of the fiscal year ending March 31, 2012, net sales were 64,802 million yen, an increase by 1.3% from the previous quarter; operating income was 2,303 million yen which was a decrease by 45.1% from the previous quarter; and net income was 668 million yen, a decrease by 63.2% from the previous quarter. Net sales increased by 1.3% from the previous quarter due to firm sales growth overall in ball bearings, rod-ends and fasteners and pivot assemblies, despite negative impacts from the Tohoku Earthquake. Operating income decreased because of the earthquake’s negative impacts on our sales to automobile and office automation equipment industries resulting in a worse product mix, and on our LED backlight production due to shortage of some materials. Income was also decreased by higher wages, and startup costs of new Cambodia and Suzhou factories both which came online in April. 1
Net Sales Quarterly (Billions of yen) Decreased 4.5% YoY 80.0 Increased 1.3% QoQ 69.8 67.9 67.5 64.8 63.9 60.5 58.7 57.4 60.0 51.8 40.0 20.0 0.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY 3/ 10 FY 3/ 11 FY 3/ 12 July 29, 2011 2 In the first quarter of the fiscal year ending March 2012, net sales were down 4.5% from the same period last year due to the weaker U.S. dollar against the Japanese yen and other currencies, even though global economy has been recovering. Based on certain assumptions, we estimate the currency impacts on net sales was approximately a negative 4.7 billion yen compared to the same period of the last fiscal year, and approximately a positive 0.8 billion yen from the previous quarter. We expect higher net sales from the second quarter because recoveries in our customers’ production from the quake are much faster than previously expected. 2
Operating Income Quarterly Decreased 61.8% YoY Decreased 45.1% QoQ (Billions of yen) 9.1% 10.0 10% 9.1% 8.9% 8.3% 7.6% 8.0 8% 6.6% 6.3 6.0 6.0 5.6 6% 5.5 4.7% 4.4 4.2 3.6% 4.0 4% 2.7 2.3 2.0 2% (0.6) 0.0 0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q (2.0) -2% -1.2% FY 3/ 10 FY 3/ 11 FY 3/ 12 Operating income Operating margin July 29, 2011 3 Operating income for the first quarter decreased 61.8% from the same period last year to 2.3 billion yen due to the negative impacts from the earthquake and currency, worse product mix, higher wages, and startup costs from new factories. Operating margin decreased by 5.3 percentage points compared to the same period last year to 3.6%. Based on certain assumptions, we estimate the currency impact on operating income was approximately a negative 0.3 billion yen compared to the same period of the last fiscal year, and almost no impact compared to the previous quarter. We expect operating income to see a large recovery from the second quarter as sales recover. 3
Machined Components Business Quarterly * The segment results by new business segment for the fiscal year ended March 2010 is unaudited. Net sales Operating income Ball bearings Rod-ends/Fasteners Operating Income Pivot assemblies 30.0 8.0 Operating Margin 28.2 (Billions of yen) 27.5 26.8 7.3 26.7 (Billions of yen) 26.6 26.3 6.9 7.1 6.9 6.8 24.9 25.1 30% 7.4 6.6 27.3% 6.3 6.3 6.6 6.3 22.6 7.0 5.9 6.0 6.7 6.7 26.0% 25.8% 20.0 5.9 25% 25.8% 4.8 4.9 4.9 4.9 5.2 4.7 25.2% 4.7 4.8 4.4 23.6% 22.9% 4.0 4.9 20% 3.1 16.0 15.7 10.0 19.1% 15.0 15.5 15.1 14.1 15.1 2.0 15% 13.4 11.8 13.6% 0.0 10% 0.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY 3/ 10 FY 3/ 11 FY 3/ 12 FY 3/ 10 FY 3/ 11 FY 3/ 12 July 29, 2011 4 For the Machined Components business segment, first quarter net sales were 27.5 billion yen, up 4.4% from the previous quarter. Operating income was 6.3 billion yen, down 7.1% from the previous quarter. Operating margin was 22.9%, down 2.9 percentage points from the previous quarter. First quarter sales of miniature and small-sized ball bearings increased by 4.0% from the previous quarter to 15.7 billion yen due to strong global demand, despite the negative impacts from the earthquake in Japanese automobile and office automation equipment production. However, profits declined due to temporarily worsened product mix by the quake, higher material, electricity and wage costs and an increase in unrealized profits. Because markets are expected to expand firmly, we will increase our production capacity gradually as we have a new Thai factory ready by this autumn as scheduled. First quarter sales of rod-ends and fasteners increased 6.1% from the previous quarter to 5.2 billion yen, due to increased demand for aircraft. Profits also increased from the previous quarter. From now on, we expect improved performance of this business because the commercial aircraft market is expected to expand more due to introduction of new models. First quarter sales of pivot assemblies for Hard Disk Drives increased by 4.8% from the previous quarter to 6.6 billion yen, due to increased sales volume. Profits were lower compared to the previous quarter, due to increased costs from the last fiscal year’s capacity expansion. We will focus on sales growth as the HDD market expands since it has almost already recovered from negative impacts from the quake. 4
Rotary Components Business Quarterly * The segment results by new business segment for the fiscal year ended March 2010 is unaudited. Net sales Operating income (Billions of yen) (Billions of yen) Operating Income 30.0 1.0 5% Operating Margin 26.7 2.0% 1.8% 25.3 1.0% 0.5 0.4 0.4 24.9 24.3 24.3 0.3 0.1% 0.0 0.0 0.0 0% 19.420.3 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 20.0 18.3 0.0% FY 3/ 10 FY 3/ 11 FY 3/ 12 (0.5) 16.1 (0.5) -2.1% (0.7) (1.0) -5% (0.9) -3.9% -3.6% 10.0 (1.5) (1.9) (2.0) -10% -11.6% (2.5) 0.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q (3.0) -15% FY 3/ 10 FY 3/ 11 FY 3/ 12 July 29, 2011 5 In the Rotary Components business segment, first quarter net sales were 24.3 billion yen, flat from the previous quarter because higher seasonal demand offset negative impacts from the earthquake which had disrupted our customers’ supply chains in automobile and office automation equipment industries. The operating deficit widened from the previous quarter to 0.9 billion yen due to worse product mix caused by the earthquake, higher wages, and increased startup costs of the new Cambodian rental factory. Operating margin was negative 3.6%, down 1.5 percentage points from the previous quarter. In the information motor business, sales of the high-value-added motors to office automation equipment industries declined due to the quake. The HDD spindle motor business had also suffered from the disruption to customers’ supply chains due to the earthquake. As our customers’ HDD production recovered month by month, our sales volume recovered and our operating losses improved. The operating losses for the quarter in total, however, stayed flat from the previous quarter. We will focus on sales recovery and lower production costs in addition to strategic restructuring of our motor factories such as construction of our own new Cambodian factory, even though we expect much higher material costs including rare earths from the second quarter. We are working on raising product prices in order to respond to higher material costs. 5
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