Briefing on items on the agenda
Latest Update : July 11, 2017
The 71st Ordinary General Meeting of Shareholders
We now report MinebeaMitsumi's business results for its 71st fiscal year, together with consolidated and non-consolidated financial statements.
More information is provided on pages 5 through 55 of the Notice of the 71st Ordinary General Meeting of Shareholders.
Brief Explanation of the Current Business Environment
During the fiscal year under review, although the Japanese economy showed a gradual recovery in consumer spending backed by an improvement in employment and income conditions and increasing signs of a recovery in corporate production and exports, there was a growing sense of uncertainty about the future in the second half of the fiscal year due to concerns about the direction of policy taken by the new U.S. administration. The U.S. economy continued to grow moderately amid a recovery in domestic and foreign demand and heightened expectations concerning fiscal spending and tax cuts put forward by the new administration. The European economy remained robust across the board centered on internal demand, although Brexit has cast a shadow of uncertainty. Meanwhile, the sense of uncertainty in Asia cannot be cast aside despite the expectation that the Chinese economy will recover from its slowdown with the support of public investments.
Working against this backdrop, the MinebeaMitsumi Group has been concentrating on cutting costs, creating high-value-added products, developing new technologies, and enhancing its marketing approach to boost profitability further.
Current Fiscal Year Results on Consolidated Basis
As a result, net sales increased by 29,112 million yen year on year to reach 638,926 million yen, a record high in net sales since the Company was founded. Operating income fell 2,423 million yen year on year to total 49,015 million yen, and ordinary income was up 1,732 million yen year on year to total 48,393 million yen. Income attributable to owners of the parent increased 4,760 million yen year on year to reach 41,146 million yen, the highest level on record.
Business Results by Segment
Now we review the business results by segment.
Please be noted that the "MITSUMI business" has been recognized as a new reportable segment from this fiscal year as disclosed therein due to the business integration with MITSUMI ELECTRIC CO., LTD. through the acquisition of its shares.
Machined Components Business
Products in our Machined components segment include our anchor product line, ball bearings, in addition to mechanical components such as rod-end bearings used primarily in aircraft and hard disk drive (HDD) pivot assemblies, etc. as well as fasteners for automobiles and aircraft. Although sales of ball bearings to external customers hit a record high as demand for energy-efficient models equipped with safety devices soared in the automobile market, sales revenues dropped due to currency fluctuations as well as other factors. Rod-end bearing sales also fell due primarily to declining production of large models in the civil aircraft market as well as the negative impact of the foreign exchange market among other factors. Even though the HDD market is shrinking, pivot assembly sales were up, yet sales revenues dropped due to currency fluctuations as well as other factors.
As a result, net sales decreased 7,501 million yen year on year to reach 156,310 million yen, and operating income fell 1,707 million yen year on year, to total 39,147 million yen.
Electronic Devices and Components Business
The core products of our Electronic devices and components segment include electronic devices (LED backlights for LCDs, sensing devices, etc.), HDD spindle motors, stepping motors, DC motors, air movers, precision motors, and special devices. Demand for our LED backlights for LCDs that offer a technological advantage in thin smartphones continued to soar. While sales of stepping motors and other motors grew mainly in the automobile market, sales revenues were down due to currency fluctuations, etc.
As a result, net sales decreased 3,852 million yen year on year to reach 441,615 million yen, and operating income fell 438 million yen year on year, to total 21,898 million yen.
The main products in the MITSUMI business are semiconductor devices, optical devices, mechanical parts, high frequency components and power supply components. Camera actuators, and products for smartphones such as switches and protection IC performed well in North America and China. Sales of automotive products such as antennas, communication modules and connectors have also increased.
As a result, net sales for the fiscal year under review were 40,342 million yen, and operating income was 2,315 million yen.
Consolidated Operating Income for this Fiscal Year
In addition to the figures stated above, operating income of the consolidated statement of income for the fiscal year includes 14,223 million yen in corporate expenses, etc., which do not belong to any particular segment, as adjustments.
Now let's move on to capital expenditures made during the fiscal year.
During the fiscal year under review, capital expenditures were 5,869 million yen for the Machined Components Business, 16,845 million yen for the Electronic Devices and Components Business, 2,945 million yen for the MITSUMI Business, 170 million yen for the Other Businesses, and 6,015 million yen for the whole company (common), totaling 31,847 million yen.
The main capital expenditures for the Machined Components Business were equipment for bearings related facilities in Thailand and Cambodia, and mechanical components related facilities in Japan. The main capital expenditures for the Electronic Devices and Components Business were equipment for LED backlights for LCDs and components related facilities in Thailand. The main capital expenditures for the MITSUMI Business were equipment for Optical devices related facilities in Philippines.
Other capital expenditures for other businesses and at the whole company (common) were mainly expenditures related to the augmented production capacity of the Cambodian plant.
Consolidated Financial Statements
Now we review the consolidated financial statements.
Consolidated Balance Sheet
Let's start off with the consolidated balance sheet.
Looking at the assets section, we see that total assets increased 183,885 million yen from the previous consolidated fiscal year end to total 643,312 million yen. The main reason for this uptick includes an increase in "Cash and deposits" and "Notes and accounts receivable", etc., due to consolidation of MITSUMI ELECTRIC CO., LTD. and improvement in business performance.
Moving on to the liabilities and net assets section, we see that liabilities totaled 317,093 million yen, with a year on year increase of 95,639 million yen. The main reason for this uptick includes an increase in "Notes and accounts payable", etc., due to consolidation of MITSUMI ELECTRIC CO., LTD. and expansion of business.
Net assets rose 88,245 million yen to total 326,218 million yen from the previous consolidated fiscal year end. The main reason for this uptick includes an increase in capital surplus and net income due to share exchange with MITSUMI ELECTRIC CO., LTD.
These results all add up to liabilities and net assets totaling 643,312 million yen, a 183,885 million yen increase over what they were at the end of previous consolidated fiscal year.
Consolidated Statement of Income
Now let's look at the consolidated statement of income.
Net sales were up 29,112 million yen year on year to total 638,926 million yen, and hit a record high. Operating income decreased 2,423 million yen year on year to total 49,015 million yen. Since we already went over net sales and operating income, I won't go into it again here.
Ordinary income was up 1,732 million yen year on year to total 48,393 million yen mainly due to improvements in non operating profit and loss, such as decrease in foreign exchange losses.
Income attributable to owners of the parent hit a record high at 41,146 million yen, an increase of 4,760 million yen from the previous fiscal year, as posting extraordinary gain of bargain purchase and extraordinary loss on bonds redemption.
Non-Consolidated Financial Statements
Next is an overview of our non-consolidated financial statements.
Non-Consolidated Balance Sheet
Now let's look at the non-consolidated balance sheet.
The balance sheet shows an 114,349 million yen increase in assets over the figure at the end of the previous fiscal year, bringing total assets to 482,615 million yen. The main reason was an increase in stocks of subsidiaries and affiliates due to share exchange with MITSUMI ELECTRIC CO., LTD and short-term loans receivable to MITSUMI ELECTRIC CO., LTD.
Looking at the liabilities and net assets section, we see that liabilities totaled 236,687 million yen, up 60,960 million yen from the previous fiscal year end. The main reason was an increase in accounts payable due to business expansion and convertible bonds succeeded from MITSUMI ELECTRIC CO., LTD.
Net assets totaled 245,927 million yen, up by 53,388 million yen over the previous fiscal year end. The main reason for this uptick includes an increase in capital surplus due to share exchange with MITSUMI ELECTRIC CO., LTD.
These results all add up to total liabilities and net assets of 482,615 million yen, an 114,349 million yen increase over the previous fiscal year end.
Non-Consolidated Statement of Income
Now let's look at the non-consolidated statement of income.
Net sales were up 1,450 million yen to reach 452,560 million yen year on year. This is due mainly to a surge in sales of LED backlights, etc.
Ordinary income fell 4,866 million yen from the previous fiscal year to total 11,084 million yen. This is because of decrease in operating income.
In addition, there was an extraordinary loss on bonds redemption due to repurchasing the convertible bonds in order to prevent a dilution of shares.
These results all add up to net income of 3,199 million yen, an 8,551 million yen decrease over the previous fiscal year end.