Presentation Transcripts

Let me explain how we came up with the 50 to 60 billion yen range in preparing our earnings guidance.
As I said, I cannot predict exactly how the economy will recover, but based on the experience and insights I've gained as CEO at MinebeaMitsumi over the last eleven years, I use this method of applying stress on our forecasts.
Let's look at last year's operating income totaling 58.6 billion yen and exclude all special factors, including foreign exchange fluctuations, from that amount. We had initially projected that the exchange rate of Thai baht to the US dollar would be 32.84 baht to the dollar, but it actually ended up at 30.96 baht to the dollar. Since we have a large factory in Thailand, employing 40,000 people, the two-baht difference made a big difference in our profit. The exchange rate has now returned to 32.5 baht, hitting 33 just a while ago. Since we finished currency hedging related to the Thai baht this year, I factored this recovery into the profit forecast before applying stresses. I projected a downside risk of about 10 billion yen for machined components, about 10 billion yen for electronic devices and components, and 5 billion yen for U-Shin and other businesses. Since Mitsumi is expected to generate about the same amount of profit thanks to its strong OIS and game related business, the total risk would be 25 billion yen.
On the other hand, we have some factors that will be sure to boost profits, such as ABLIC (which I will explain later on), and can expect to generate at least 4 billion yen. That brings my projected operating income figure to somewhere around 60 billion yen. Since the current pandemic is said to be the kind that occurs once in 200 years and may have a bigger impact than the financial crisis with Lehman Brothers' collapse, I added another downside risk of 10 billion yen. These made the projected operating income range 50 to 60 billion yen although things may be different depending on how the pandemic is controlled.
When the Lehman Brothers' bankruptcy shocked the economy, our operations were still small and we announced an operating income forecast in the range of 10 to 14 billion yen in the first quarter. In the second quarter we were still unable to forecast operating income with that range, but in the third quarter we forecasted it to be in the middle of the range, at 11 billion yen. In the end, our operating income came to 12.1 billion yen, which was right in the middle of the range.
I'm not sure what's going to happen this time around, but since our company is now four or five times bigger than before, I'm hoping that operating income will be somewhere near the figure I just mentioned, that is 60 billion yen, if things go well.
I'm sorry that I can only give you a rough idea about our forecast right now, but no one can make projections under the current circumstances, so that's all I can give you.