Presentation Transcripts

The performance forecast for this year has been revised upward in light of the 13.0 billion yen gain on the sale of the Tokyo Headquarters building.
We were able to surpass our target for net sales of 1 trillion yen, and I hope to also surpass the target operating income of 100.0 billion yen this year, even excluding this gain on sale, with the tailwind provided by the weakening yen.

There have been many ups and downs to the initial assumptions. Aircraft components are recovering, and despite some remaining bottlenecks, automobile production is slowly increasing as supply chain disruptions are addressed. Sales of game consoles appear to be strong, and if the semiconductor shortage eases, I expect there will be an increase in backlight products for low-cost smartphones.
I also expect U-Shin to recover in the fourth quarter. U-Shin has been working on Project Horizon, which is a project to eliminate operating losses in the European business. As part of the project, the number of personnel will be reduced by 300, the plant in Spain will be closed, manufacturing in France will be scaled down, and production will be relocated to low-cost countries as much as possible, and U-Shin is making good progress towards this goal. We are also looking into measures such as scaling back or eliminating manufacturing operations in Germany. Furthermore, we would like to integrate Honda Lock by the end of December or next January at the latest. As for antitrust laws, I believe we will somehow be able to achieve compliance in each country by the end of this month.

At this time, the forecast for operating income at U-Shin in the fourth quarter is around 2 billion yen, but if Honda Lock is added, it will bring in about an additional 2 billion yen, so even if automobile production does not completely bounce back, the access products of U-Shin and Honda Lock combined will most likely allow us to surpass operating income of 4 billion yen in the fourth quarter.
In addition, the most recent forecast calls for around 1.7 billion yen in negative goodwill associated with the former SUMIKO TEC, which we acquired on November 1 and renamed Minebea Connect, but this has not yet been included in the performance forecast.
Similarly, we expect a certain amount of negative goodwill in relation to Honda Lock, so I believe that operating income under IFRS, which will include this, will reach a fairly high level.