Latest Update : Aug.2, 2019
Overview for the 1Q of FY 3/2020 (From April 1, 2019 to June 30, 2019)
During the first quarter of the fiscal year (April 1, 2019 through June 30, 2019), business sentiment continued to worsen in the Japanese economy as corporate production activities slowed, especially in the manufacturing industry. This was due to declining external demand against a backdrop of trade friction between the United States and China, while inventory that had accumulated through the end of the previous year was liquidated. In the United States, there was increasing uncertainty over the future due to an increasing risk of additional tariffs, primarily in the manufacturing industry, and deceleration in the job market. The European economy was sluggish due to persistent uncertainty over the future resulting from the possibility of a no-deal Brexit as well as a slowdown in external demand and inventory adjustment in the manufacturing industry despite improvements in the employment and income environment. In Asia, the Chinese economy slowed due to continued sluggishness of exports, primarily to the United States, as well as stunted growth in the domestic automotive market in which investment control measures implemented through the previous year caused a delay in the recovery of internal demand.
Working against this backdrop, the MinebeaMitsumi Group concentrated on cutting costs, creating high-value-added products, developing new technologies, and enhancing its marketing approach to boost profitability further.
As a result, net sales were down 8,613 million yen (-4.0%) year on year to 204,425 million yen. Operating income was down 10,628 million yen (-74.4%) year on year to 3,663 million yen, profit before income taxes was down 10,490 million yen (-74.0%) to 3,680 million yen, and profit for the period attributable to owners of the parent was down 8,589 million yen (-78.9%) to 2,297 million yen.
U-Shin Ltd. was made a subsidiary through a tender offer on April 10. The company has been included in the scope of consolidation as of the date of the business integration. This includes the company's profits and losses from the date of the business integration on.
Performance by Segment for the 1Q of FY 3/2020 (From April 1, 2019 to June 30, 2019)
In conjunction with the acquisition of U-Shin Ltd., the U-Shin business is disclosed as a reporting segment as of the first quarter. Additionally, the battery module products that were included under the MITSUMI business were transferred to the Electronic devices and components business. Accordingly, segment information has been updated to reflect this change in company organization.
The segment information disclosed for the first quarter of the previous year has been prepared based on the post-change reportable segments.
Machined Components Business Segment
The main 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 aircraft. Sales of ball bearings were down both in volume and amount due to decreased demand from fan motors despite solid demand in the automobile market. Rod-end bearing sales increased owing to favorable orders in the small and medium aircraft market. Pivot assembly sales were down both in volume and amount due to shrinking of the HDD market.
As a result, net sales were down 1,202 million yen (-2.5%) year on year to 46,053 million yen, and operating income was down 1,002 million yen (-8.6%) to 10,699 million yen.
Electronic Devices and Components Business
The core products of our Electronic devices and components segment include electronic devices (devices such as LED backlights for LCDs, sensing devices (measuring components), etc.), HDD spindle motors, stepping motors, DC motors, air movers, and special devices. Sales of stepping motors and other motors were down due to decreased demand in the automobile market. LED backlights for LCDs sales were down due to the shrinking of the smartphone market.
As a result, net sales were down 17,010 million yen (-18.0%) year on year to 77,639 million yen, and the operating loss increased 2,782 million yen year on year to total 577 million yen.
The main products in the MITSUMI business segment are semiconductor devices, optical devices, mechanical components, high frequency components and power supply components. Although camera actuators, switches, protection IC, and connectors performed well, sales were down due to the decrease in game consoles and other mechanism components.
As a result, net sales were down 21,302 million yen (-30.0%) year on year to 49,654 million yen, and operating income was down 2,670 million yen (-99.4%) to 16 million yen.
The main products in the U-Shin business segment are key sets, door latches, door handles, and other automotive components as well as industrial machinery components and housing equipment components (such as building and house locks). Automotive components performed well in the domestic market, but demand was sluggish in the European, Chinese, and Central and South American markets. Demand for industrial machinery components for use in agricultural and construction equipment was strong.
As a result, net sales were 30,734 million yen, and operating income was 1,016 million yen.
Other Business Segment
Machines produced in-house are the main products in our Other business segment. Net sales were up 167 million yen (94.3%) year on year to 345 million yen, while the operating loss increased 272 million yen year on year to total 367 million yen.
In addition to the figures noted above, 7,124 million yen in corporate expenses, etc. not belonging to any particular segment is indicated as adjustments. The total amount of adjustments was 2,206 million yen for the first quarter of the previous fiscal year.
Analysis of Financial Position for the 1Q of FY 3/2020 (From April 1, 2019 to June 30, 2019)
Assets, Liabilities, and Net Assets
Our Group sees "strengthening our financial position" as a top priority and is taking various steps, such as efficient controlling capital investments, asset management, and reducing interest-bearing debt.
Total assets at the end of the first quarter were 847,612 million yen, up 105,485 million yen from the end of the previous fiscal year. The main reason for this uptick was an increase in property, plant and equipment and inventories.
Total liabilities at the end of the first quarter were 446,439 million yen, up 111,572 million yen from the end of the previous fiscal year. The main reason for this was bonds and borrowings and trade and other payables.
Equity came to 401,173 million yen, bringing the equity ratio attributable to owners of the parent down 8.2 percentage points from the end of the previous fiscal year to 45.7%.
Condition of Cash Flows
Cash and cash equivalents at the end of the first quarter were 100,948 million yen, down 21,484 million yen from the end of the previous fiscal year.
Cash flows from various business activities during the first three months of the fiscal year and relevant factors were as follows:
Net cash provided by operating activities amounted to 2,934 million yen (compared to 14,907 million yen in the same period of the previous year). This was primarily due to increases and decreases in profit before income taxes, depreciation and amortization, trade and other receivable, and inventories, etc. Net cash used in investing activities amounted to 11,787 million yen (compared to 14,754 million yen in the same period of the previous year). This was primarily due to purchase of property, plant and equipment, etc. Net cash used in financing activities amounted to 10,112 million yen (compared to 5,567 million yen in the same period of the previous year). This was primarily due to repayments of long-term borrowings and dividends paid, etc.
The content of this page is based on information included in the "Brief Report for First Quarter of Fiscal Year Ending March 2020 (From April 1, 2019 to June 30, 2019)" announced on August 2, 2019.