Latest Update : Dec.10, 2020
* MinebeaMitsumi has adopted International Financial Reporting Standards (IFRS) from the 1Q of FY3/2019.
Overview for the 1H of FY 3/2021 (From April 1, 2020 to September 30, 2020)
During the first half of the fiscal year (April 1, 2020 through September 30, 2020), the Japanese economy was hit by the largest economic downturn since the global financial crisis triggered by the Lehman Brothers bankruptcy. The factors behind this downturn include substantial declines in exports and consumption, resulting from the spread of COVID-19, declining corporate earnings, and reduced capital investment. Economic activity levels remain below where they were pre-COVID-19. Although there were signs of a recovery in the US economy, particularly in manufacturing, exports and capital investment were down substantially due to the global economic downswing caused by the spread of COVID-19. The future remains uncertain due to factors including restrictions on economic activity in some states and the upcoming presidential election. In Europe, there were signs of a recovery following the decline caused by the extended lockdown and other such factors, but there is concern over a second wave of infections, so it will take some time for economic activity to return to pre-COVID-19 levels. In Asia, China saw resumed economic activity. In addition to investment by the Chinese government in real estate development and measures to promote infrastructure investment, resumption of activities overseas brought an increase in exports, which had been on the decline. As such, the trend is toward recovery, but the future remains uncertain due to concern over further intensification of trade friction between the United States and China.
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 22,168 million yen (-4.6%) year on year to 461,730 million yen. Operating income was down 26 million yen (-0.1%) year on year to 22,921 million yen, profit before income taxes was down 724 million yen (-3.2%) to 22,249 million yen, and profit for the period attributable to owners of the parent was up 497 million yen (3.0%) to 16,812 million yen.
ABLIC Inc. was made a subsidiary on April 30, 2020. The company has been included in the scope of consolidation in conjunction with the business integration. This includes the company's profits and losses from the date of the business integration on.
Provisional accounting treatments for business combinations through acquisition of U-Shin Ltd. were finalized at the end of the previous fiscal year, and the contents of finalization of the provisional accounting treatments are reflected on the figures for the same period of the previous year.
Performance by Segment for the 1H of FY 3/2021 (From April 1, 2020 to September 30, 2020)
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 due to decreased demand in the automobile market despite solid demand from fan motors. Rod-end bearing sales decreased due to decreased aircraft-related demand. Pivot assembly sales were down due to shrinking of the HDD market.
As a result, net sales were down 17,639 million yen (-19.3%) year on year to 73,548 million yen, and operating income was down 6,843 million yen (-32.7%) to 14,064 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.
Demand for stepping motors and other motors was down due to sluggishness in the automobile market, but demand for our LED backlights for LCDs that offer a technological advantage in thin devices remained strong, resulting in sales remaining flat.
As a result, net sales were down 645 million yen (-0.4%) year on year to 178,274 million yen, and operating income was up 1,605 million yen (26.4%) to 7,681 million yen.
The main products in the MITSUMI business segment are semiconductor devices, optical devices, mechanical components, high frequency components and power supply components.
Semiconductor devices performed well as did game consoles and other mechanical components, resulting in an increase in net sales.
Profit and loss of ABLIC Inc. are included in the MITSUMI business segment in conjunction with its acquisition.
As a result, net sales were up 16,768 million yen (11.1%) year on year to 167,346 million yen, and operating income was up 1,835 million yen (25.6%) to 8,984 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 components and housing equipment components (such as building and house locks).
Sales of automotive components were down substantially due to deceleration of the automotive market. Market deceleration also caused a decrease in sales of industrial components.
As a result, net sales were down 20,639 million yen (-32.9%) year on year to 42,153 million yen, and the operating loss increased 974 million yen year on year to total 2,428 million yen.
Other Business Segment
Machines produced in-house are the main products in our Other business segment.
Net sales were down 13 million yen (-3.1%) year on year to 409 million yen, and the operating loss increased 137 million yen year on year to total 831 million yen.
In addition to the figures noted above, 6,003 million yen in corporate expenses, etc. not belonging to any particular segment is indicated as adjustments. The total amount of adjustments was 11,945 million yen for the second quarter of the previous fiscal year.
Analysis of Financial Position for the 1H of FY 3/2021 (From April 1, 2020 to September 30, 2020)
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 of capital investments, asset management, and reducing interest-bearing debt. We will reform our portfolio to increase the weight of our highly profitable core businesses and engage in highly effective M&A, promoting an appropriate and flexible financial strategy.
Total assets at the end of the second quarter were 934,907 million yen, up 70,426 million yen from the end of the previous fiscal year. The main reason for this uptick was an increase in inventories, goodwill, and property, plant and equipment.
Total liabilities at the end of the second quarter were 520,558 million yen, up 58,353 million yen from the end of the previous fiscal year. The main reason for this was an increase in bonds and borrowings.
Equity came to 414,349 million yen, bringing the equity ratio attributable to owners of the parent down 1.6 percentage points from the end of the previous fiscal year to 44.0%.
Condition of Cash Flows
Cash and cash equivalents at the end of the second quarter were 124,569 million yen, down 6,177 million yen from the end of the previous fiscal year.
Cash flows from various business activities during the first fiscal half and relevant factors were as follows:
Net cash provided by operating activities came to 7,731 million yen (compared to 13,892 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 receivables, and inventories.
Net cash flows used in investing activities came to 47,455 million yen (compared to 27,017 million yen in the same period of the previous year). This was primarily due to purchase of property, plant and equipment and purchase of investments in subsidiaries resulting in change in scope of consolidation, etc.
Net cash flows provided by financing activities came to 33,425 million yen (compared to 1,481 million yen used in the same period of the previous year). This was primarily due to increases and decreases in short-term borrowings.
The content of this page is based on information included in the "Brief Report for Second Quarter of Fiscal Year Ending March 2021 (From April 1, 2020 to September 30, 2020)" announced on November 6, 2020.