Latest Update : Aug.15, 2016

Back to Investor Meeting Presentations (FY3/2017)

Investor Conference Call for 1Q FY 3/2017 held on August 2, 2016

* Some parts have been added and modified to make them easier to understand.


Question and Answer

For LED backlights, the launch of the parts for new model was later than we originally expected. Despite that, we remain optimistic about the sales of LED backlights at this point in time, given that shipments started to take off in late July. Based on that, we expect Q2 will be well above Q1 in terms of LED backlight sales.
We expect LED backlight sales for Q2 to be around twice as large as sales in Q1.
We didn't have any one-time adjustments factored into the Q1 profit for the Machined Components segment.
Just as you said, at this time the overall guidance for the fiscal year remains the same on both the half-year and full-year basis. Having said that, we believe changes in the currency exchange rates have the greatest impact on our performance. Our assumption for yen-dollar exchange rate remains 1USD=105JPY, which is the same as it was at the beginning of the current fiscal year. We find it very difficult to predict changes in the currency value in light of the significant volatility in the recent currency market. In addition to the currency factor, changes in demand for LED backlights will also have a significant impact on our overall performance.
We intend to start working out the specific details of the Business Support Agreement soon. The first thing we will provide will be manufacturing support, and next will be support for sales expansion. We aim to achieve noticeable results as quickly as we can.
I am not in a position to comment on that because we are not involved in working out MITSUMI's guidance for this fiscal year. With the Business Support Agreement in place now, I hope that we can act on this sense of urgency and make great things happen quickly.
External sales of ball bearings came to 159 million units, with another 64 million units sold internally in April. In May, external sales were 162 million units, and internal sales were 63 million units. In June, external sales were 168 million units, and internal sales were 66 million units. We expect to sell 162 million units externally and 69 million units internally per month during the July to September period. In July, external sales of ball bearings came to 165 million units, which was higher than the plan.
Demand for our ball bearings is firm mainly from auto manufacturers.
Sales of pivot assemblies came to 24 million units in April, 27 million units in May, and 25 million units in June, with an average of 26 million units per month for the quarter. We are expecting average sales of 26 million units per month for the July to September period. In July, sales of pivot assemblies came to 28 million units, which also exceeded the plan.
The current level of inventory is at 87 billion yen, down 16 billion yen from the end of the preceding quarter. This mainly reflects the completion of inventory adjustment for LED backlights and the currency impact. We believe that the LED backlight inventory is now down to its lowest level for this year.
It is true that the capacity utilization of LED backlights was quite low.
Yes, that's right.
It is true that the demand for LED backlights will increase due to seasonality, but we still find it hard to accurately forecast the demand.
The original guidance for this fiscal year still remains largely unchanged.
Strong external sales of ball bearings in units have contributed to the segment's operating profit.
No, there has been no major change in the product mix for the segment. The strong operating profit primarily reflected the growth in sales volume.
Yes, that is another reason behind the strong operating profit for the segment.
Demand from auto manufacturers remained steady. Demand from office automation equipment manufacturers also remained steady, in contrast to your assumption.
Not necessarily. Stepping motors were the main player here.
Moatech improved its profitability thanks to consistent efforts made over the last couple of years, such as closing a factory in China and making other business restructuring moves.
The reason behind the later launch was related to delayed order placements of customers. We know nothing more than that.
Whenever we make a ramp up of production for a new product launch, we normally experience minor issues of some kind. To date, there have been no noteworthy problems.
I'd like to answer your question by giving you data in terms of sales value, not in volume. Looking at total sales of bearings made to customers, auto manufacturers accounted for 19%, aerospace for 35%, home electrical appliance industry for 4%, office automation equipment manufacturers for 6%, PCs and peripheral equipment industry for 4%, motor manufacturers for 16%, and customers in other industries for 17%. Sales to auto industry grew 6% year-on-year, which was followed by aerospace up 4%, home electrical appliance unchanged, office automation equipment down 21%, PCs and peripheral equipment down 9%, motors down 8%, and others down 15%. Overall, bearing sales were down 3% in yen value on a year-on-year basis.
Yes, that's right.
We launch new products for new models every year. There are no major differences this year. We are not able to say any more about unit prices and product specifications because of non-disclosure agreements with our customers.

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