Business Results Business Results First Quarter of Fiscal Year - - PDF document

Business Results

First Quarter of Fiscal Year Ending March 31, 2012

Business Results

First Quarter of Fiscal Year Ending March 31, 2012

July 29, 2011

Minebea Co., Ltd.

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July 29, 2011 1

Summary of Consolidated Business Results for 1Q

Profits declined due to supply chain disruption by the Tohoku Earthquake, worse product mix, higher wages and higher startup costs from new factories

FY ending

• Mar. '12

1Q 4Q 1Q

YoY QoQ Net sales

67,891 63,944 64,802

• 4.5%

+ 1.3%

Operating income

6,024 4,194 2,303

• 61.8%
• 45.1%

Ordinary income

5,600 3,710 1,870

• 66.6%
• 49.6%

Net income

3,815 1,816 668

• 82.5%
• 63.2%

9.99 4.75 1.76

• 82.4%
• 62.9%

1Q of FY

• Mar. ’11

4Q of FY

• Mar. ’11

1Q of FY

• Mar. ’12

¥92.81 ¥81.78 ¥82.04 ¥120.53 ¥110.55 ¥118.54 ¥2.86 ¥2.67 ¥2.72 ¥13.60 ¥12.39 ¥12.57 Change Thai Baht Chinese RMB Net income per share (yen) Foreign exchange rates US$ Euro (Millions of yen) FY ended

• Mar. '11

Looking at consolidated business results for the first quarter of the fiscal year ending March 31, 2012, net sales were 64,802 million yen, an increase by 1.3% from the previous quarter; operating income was 2,303 million yen which was a decrease by 45.1% from the previous quarter; and net income was 668 million yen, a decrease by 63.2% from the previous quarter. Net sales increased by 1.3% from the previous quarter due to firm sales growth overall in ball bearings, rod-ends and fasteners and pivot assemblies, despite negative impacts from the Tohoku Earthquake. Operating income decreased because of the earthquake’s negative impacts on our sales to automobile and office automation equipment industries resulting in a worse product mix, and on our LED backlight production due to shortage of some materials. Income was also decreased by higher wages, and startup costs of new Cambodia and Suzhou factories both which came online in April.

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July 29, 2011

51.8 57.4 58.7 60.5 67.9 69.8 67.5 63.9 64.8

0.0 20.0 40.0 60.0 80.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY 3/ 10 FY 3/ 11 FY 3/ 12

(Billions of yen)

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Net Sales

Quarterly

Decreased 4.5% YoY Increased 1.3% QoQ

In the first quarter of the fiscal year ending March 2012, net sales were down 4.5% from the same period last year due to the weaker U.S. dollar against the Japanese yen and other currencies, even though global economy has been recovering. Based on certain assumptions, we estimate the currency impacts on net sales was approximately a negative 4.7 billion yen compared to the same period of the last fiscal year, and approximately a positive 0.8 billion yen from the previous quarter. We expect higher net sales from the second quarter because recoveries in our customers’ production from the quake are much faster than previously expected.

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July 29, 2011 3

Operating Income

Quarterly

Decreased 61.8% YoY Decreased 45.1% QoQ

(0.6) 2.7 4.4 5.5 6.0 6.3 5.6 4.2 2.3

• 1.2%

4.7% 7.6% 9.1% 8.9% 9.1% 8.3% 6.6% 3.6%

• 2%

0% 2% 4% 6% 8% 10% (2.0) 0.0 2.0 4.0 6.0 8.0 10.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY 3/ 10 FY 3/ 11 FY 3/ 12

Operating income Operating margin

(Billions of yen)

Operating income for the first quarter decreased 61.8% from the same period last year to 2.3 billion yen due to the negative impacts from the earthquake and currency, worse product mix, higher wages, and startup costs from new factories. Operating margin decreased by 5.3 percentage points compared to the same period last year to 3.6%. Based on certain assumptions, we estimate the currency impact on operating income was approximately a negative 0.3 billion yen compared to the same period of the last fiscal year, and almost no impact compared to the previous quarter. We expect operating income to see a large recovery from the second quarter as sales recover.

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July 29, 2011 4

Machined Components Business

Quarterly

Net sales Operating income

* The segment results by new business segment for the fiscal year ended March 2010 is unaudited.

11.8 13.4 14.1 15.0 16.0 15.5 15.1 15.1 15.7 4.9 4.8 4.4 4.7 4.8 4.9 4.9 4.9 5.2 5.9 6.7 6.7 7.0 7.4 6.3 6.6 6.3 6.6

0.0 10.0 20.0 30.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY 3/ 10 FY 3/ 11 FY 3/ 12

Ball bearings Rod-ends/Fasteners Pivot assemblies

22.6 24.9 25.1 26.7 28.2

(Billions of yen)

26.8 26.6 26.3 27.5 3.1 4.7 5.9 6.9 7.1 7.3 6.9 6.8 6.3 13.6% 19.1% 23.6% 25.8% 25.2% 27.3% 26.0% 25.8% 22.9% 10% 15% 20% 25% 30% 0.0 2.0 4.0 6.0 8.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY 3/ 10 FY 3/ 11 FY 3/ 12

Operating Income Operating Margin (Billions of yen)

For the Machined Components business segment, first quarter net sales were 27.5 billion yen, up 4.4% from the previous quarter. Operating income was 6.3 billion yen, down 7.1% from the previous

• quarter. Operating margin was 22.9%, down 2.9 percentage points from the previous quarter.

First quarter sales of miniature and small-sized ball bearings increased by 4.0% from the previous quarter to 15.7 billion yen due to strong global demand, despite the negative impacts from the earthquake in Japanese automobile and office automation equipment production. However, profits declined due to temporarily worsened product mix by the quake, higher material, electricity and wage costs and an increase in unrealized profits. Because markets are expected to expand firmly, we will increase our production capacity gradually as we have a new Thai factory ready by this autumn as scheduled. First quarter sales of rod-ends and fasteners increased 6.1% from the previous quarter to 5.2 billion yen, due to increased demand for aircraft. Profits also increased from the previous quarter. From now

• n, we expect improved performance of this business because the commercial aircraft market is

expected to expand more due to introduction of new models. First quarter sales of pivot assemblies for Hard Disk Drives increased by 4.8% from the previous quarter to 6.6 billion yen, due to increased sales volume. Profits were lower compared to the previous quarter, due to increased costs from the last fiscal year’s capacity expansion. We will focus on sales growth as the HDD market expands since it has almost already recovered from negative impacts from the quake.

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July 29, 2011 5

Rotary Components Business

Quarterly

Net sales Operating income

* The segment results by new business segment for the fiscal year ended March 2010 is unaudited.

0.0 10.0 20.0 30.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY 3/ 10 FY 3/ 11 FY 3/ 12

19.420.3 16.1 18.3 24.9

(Billions of yen)

26.7 25.3 24.3 24.3 (1.9) (0.7) 0.4 0.4 0.0 0.3 0.0 (0.5) (0.9)

• 11.6%
• 3.9%

2.0% 1.8% 0.0% 1.0% 0.1%

• 2.1%
• 3.6%
• 15%
• 10%
• 5%

0% 5% (3.0) (2.5) (2.0) (1.5) (1.0) (0.5) 0.0 0.5 1.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY 3/ 10 FY 3/ 11 FY 3/ 12

Operating Income Operating Margin (Billions of yen)

In the Rotary Components business segment, first quarter net sales were 24.3 billion yen, flat from the previous quarter because higher seasonal demand offset negative impacts from the earthquake which had disrupted our customers’ supply chains in automobile and office automation equipment

• industries. The operating deficit widened from the previous quarter to 0.9 billion yen due to worse

product mix caused by the earthquake, higher wages, and increased startup costs of the new Cambodian rental factory. Operating margin was negative 3.6%, down 1.5 percentage points from the previous quarter. In the information motor business, sales of the high-value-added motors to office automation equipment industries declined due to the quake. The HDD spindle motor business had also suffered from the disruption to customers’ supply chains due to the earthquake. As our customers’ HDD production recovered month by month, our sales volume recovered and our operating losses

• improved. The operating losses for the quarter in total, however, stayed flat from the previous quarter.

We will focus on sales recovery and lower production costs in addition to strategic restructuring of our motor factories such as construction of our own new Cambodian factory, even though we expect much higher material costs including rare earths from the second quarter. We are working on raising product prices in order to respond to higher material costs.

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July 29, 2011 6

Electronic Devices & Components Business Quarterly

Net sales Operating income

* The segment results by new business segment for the fiscal year ended March 2010 is unaudited. 1.7 1.5 1.2 1.0 1.5 1.3 0.9 0.4 (0.1) 19.3% 16.3% 12.9% 11.5% 15.4% 12.3% 8.4% 4.7%

• 1.1%
• 5%

0% 5% 10% 15% 20% (0.5) 0.0 0.5 1.0 1.5 2.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY 3/ 10 FY 3/ 11 FY 3/ 12

Operating Income Operating Margin (Billions of yen)

5.4 6.6 7.0 6.3 6.7 8.2 9.1 7.4 7.4 3.4 2.9 2.0 2.2 3.0 2.5 1.8 1.8 1.5

0.0 2.0 4.0 6.0 8.0 10.0 12.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY 3/ 10 FY 3/ 11 FY 3/ 12

Measuring components Electronic devices

8.5 9.0 8.8 9.5 9.7

(Billions of yen)

10.7 10.9 9.2 9.0

In the Electronic Devices and Components business segment, first quarter net sales were 9.0 billion yen, down 2.7% from the previous quarter. Operating income turned slightly negative to 0.1 billion

• yen. Operating margin was negative 1.1%, down 5.8 percentage points from the previous quarter.

Net sales of electronic devices were flat from the previous quarter at 7.4 billion yen. However, profit turned negative. This is because of the earthquake’s negative impacts on our LED backlight production, due to temporary shortage of some materials and increased startup costs of new Suzhou

• factory. The material shortage was already solved and our production came back to normal. This

business turned profitable since June. We will focus on strengthening our LED backlight production capacity, including a quick capacity increase at the new Suzhou factory, as sales are expected to jump up in August. Net sales of measuring components decreased by 16.7% from the previous quarter to 1.5 billion yen, due to decreased automobile production caused by the earthquake. Profits likewise decreased from the previous quarter. We expect sales are going to recover as automobile production recovers.

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July 29, 2011 7

Other Business

Quarterly

Net sales Operating income

* The segment results by new business segment for the fiscal year ended March 2010 is unaudited.

2.3 2.6 2.7 2.8 2.6 2.7 2.6 2.0 1.8 0.8 0.9 1.0 0.8 0.9 1.1 0.7 0.6 0.7 1.2 1.2 1.4 1.3 1.5 1.9 1.5 1.5 1.5

0.0 2.0 4.0 6.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY 3/ 10 FY 3/ 11 FY 3/ 12

Special devices & Other Speakers Keyboards

5.1 5.0 4.3 4.8 5.1

(Billions of yen)

5.7 4.7 4.1 4.0 (0.6) (0.2) 0.0 0.1 0.1 0.3 0.1 (0.1) (0.1)

• 14.0%
• 3.8%

0.7% 1.2% 2.2% 6.1% 2.2%

• 1.5%
• 1.5%
• 15%
• 10%
• 5%

0% 5% 10% (0.8) (0.4) 0.0 0.4 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY 3/ 10 FY 3/ 11 FY 3/ 12

Operating Income Operating Margin (Billions of yen)

In the Other business segment, first quarter net sales were 4.0 billion yen, down 3.1% from the previous quarter. Operating loss was 0.1 billion yen. Operating margin was negative 1.5%, flat from the previous quarter. Net sales of keyboards decreased by 10.0% from the previous quarter, to 1.8 billion yen. Operating income of this business was slightly negative. Net sales of speakers increased by 16.7% from the previous quarter, to 0.7 billion yen. Its losses narrowed. Net sales of special devices and other components were flat from the previous quarter, at 1.5 billion

• yen. Its profits increased from the previous quarter.

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July 29, 2011 8

Net Income

Quarterly

Decreased 82.4% YoY Decreased 62.9% QoQ

(1.7) 1.3 3.9 3.1 3.8 3.5 3.3 1.8 0.7 (4.3) 3.4 10.2 8.1 10.0 9.2 8.7 4.8 1.8

(6.0) (4.0) (2.0) 0.0 2.0 4.0 6.0 8.0 10.0 12.0 (3.0) (2.0) (1.0) 0.0 1.0 2.0 3.0 4.0 5.0 6.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY 3/ 10 FY 3/ 11 FY 3/ 12

Net income Net income per share (right axis)

(Billions of yen) (yen)

Net income for the first quarter decreased by 82.5% from the same period last year to 0.7 billion yen as operating income decreased. Net income per share was 1.8 yen.

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July 29, 2011 9

S.G. & A. Expenses

Quarterly

10.3 10.1 10.3 10.3 11.7 11.5 11.0 10.6 11.4 19.9% 17.6% 17.6% 17.1% 17.3% 16.5% 16.3% 16.5% 17.5%

0% 10% 20% 30% 0.0 5.0 10.0 15.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY 3/ 10 FY 3/ 11 FY 3/ 12

S.G. & A. expenses S.G. & A. to sales ratio

(Billions of yen)

SG&A expenses in the first quarter increased 0.8 billion yen compared to the previous quarter to 11.4 billion yen. SG&A expenses-to-sales ratio increased by 1.0 percentage point to 17.5%. This was mainly caused by higher wages, and increased startup expenses from new factories. It is a tough business environment, we will continue our efforts to hold expenses down.

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July 29, 2011 10

Inventories

Quarterly

37.0 34.7 35.1 35.9 39.3 41.7 42.7 44.0 44.3

0.0 10.0 20.0 30.0 40.0 50.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY 3/ 10 FY 3/ 11 FY 3/ 12

(Billions of yen)

Inventories increased by 0.3 billion yen compared to the previous quarter. This is due mainly to inventory growth to meet increasing demand in ball bearings and pivot assemblies, and a new addition of work in process at our new factories in Cambodia and Suzhou.

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July 29, 2011 11

Capital Expenditure & Depreciation

Yearly

*From FY 3/09, due to change in lease accounting, assets of finance leases are included.

24.9 20.2 11.1 27.3 7.2 28.0 26.4 24.0 21.1 20.8 5.1 21.1

0.0 10.0 20.0 30.0

Mar.'08 Mar.'09 Mar.'10 Mar.'11 Mar.'12 1Q Mar.'12 Forecast

Capital Expenditure Depreciation & Amortization Expenses

(Billions of yen)

Capital expenditure for the first quarter was 7.2 billion yen. Both a new LED backlight factory in Suzhou, China and a new rental motor factory in Cambodia came online in April. We are working on a new Thai ball bearing factory, our own new motor factory in Cambodia and a new multi-purpose factory in Lop Buri, Thailand. Depreciation and amortization expenses for the first quarter were 5.1 billion yen.

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July 29, 2011 12

Net Interest-Bearing Debt

Net Interest-bearing debt = Interest-bearing debt – Cash and cash equivalents Free Cash Flow = CF from operating activities + CF from investing activities

Yearly

150.7 146.9 128.5 109.6 110.0 96.9 103.6 108.6 102.0 3.8 9.1 22.7 23.4 12.5 17.7 (4.2) ( 2.3) 7.0 (10.0) 0.0 10.0 20.0 30.0 40.0 0.0 40.0 80.0 120.0 160.0

Mar.'05 Mar.'06 Mar.'07 Mar.'08 Mar.'09 Mar.'10 Mar.'11 Mar.'12 1Q Mar.'12 Forecast

Net interest-bearing debt Free cash flow (right axis)

(Billions of yen) (Billions of yen) 6.0 101.0

Net interest-bearing debts, which are interest-bearing debts minus cash and cash equivalents, were 108.6 billion yen at the end of the first quarter, an increase of 5.0 billion yen from the end of the previous fiscal year. This is because of increased cash needs for bonus payments, dividend payments, repurchases of our own shares and investments at new factories, in addition to lower profits. Free cash flow for this fiscal year is expected to become positive, as profit increases from now on.

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July 29, 2011 13 13

Forecast for Fiscal Year Ending March 31, 2012

Full year forecast unchanged

FY ended

• Mar. '11

Full year Upper end Lower end Upper end Lower end Upper end Lower end Net sales

269,139 135,000 123,000 150,000 137,000 285,000 260,000

Operating income

22,163 9,700 8,100 14,800 12,900 24,500 21,000

Ordinary income

20,364 8,700 7,100 13,800 11,900 22,500 19,000

Net income

12,465 4,400 3,300 8,600 7,700 13,000 11,000 32.61 11.60 8.70 22.74 20.36 34.34 29.06

• Mar. '11

Full year FY ending

• Mar. '12

Assumption ¥86.04 ¥84.00 ¥113.22 ¥111.00 ¥2.75 ¥2.80 ¥12.78 ¥12.60 Chinese RMB Foreign exchange rates US$ Euro Thai Baht (Millions of yen) Fiscal Year ending Mar. '12 1st Half 2nd Half Full year Net income per share (yen)

We do not change at this time our full year forecast for this fiscal year announced in May. Although there is still some uncertainty regarding impacts from the earthquake, foreign currency shifts and raw material costs including rare earths, many product markets are showing their recovering trends and, at the same time, we are working on raising motor product prices.

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July 29, 2011 14

Starting to produce LED backlights for tablet PCs

April 2011: Suzhou LED backlight factory started operation December 2011: expected to start producing LED backlights for tablet PCs

• Minebea secured big orders as its LED backlights are superior because

they are thinner, brighter and are suitable for tablet PCs.

• Minebea has already equipped the Suzhou factory with new production

machines so that no extra big investments are necessary.

• LED backlights will be produced mainly in Suzhou.

August 2011: expected to reach stepped-up production level

We will start producing LED backlights for tablet PCs from December at our new Suzhou factory which came online in April, as we have secured large orders. This was due to the fact that Minebea’s LED backlights are superior since they are thinner and brighter, making them suitable for smart phones and tablet PCs. Minebea has already equipped the Suzhou factory with new production machines for larger products to prepare for increasing demand for larger panels such for tablet PCs, so that no extra big investments are necessary. We plan to focus our manufacturing of LED backlights for tablet PCs mainly at the Suzhou factory.

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July 29, 2011 15

Construction of new Thai and Cambodian factories

Completed most of the exterior work and start operation in Autumn Multi-purpose ball bearing factory in Thailand Undergoing the foundation work and start operation at the end of 2011 Own factory in Cambodia Building area 28,000㎡ Building area 20,500㎡

Regarding construction of new factories, we have almost completed exterior work for a new multi- purpose ball bearing factory building in Bang Pa-In, Thailand as scheduled. We plan to complete construction by the summer, and start operation in the autumn to produce ball bearings for pivot

• assemblies. We also plan to produce low-priced, mass-produced ball bearings for emerging markets,

and medium-sized ball bearings later. We have started construction of our own new Cambodia factory in May and are currently working on its foundation such as piling. By the end of this year, we plan to complete a building and start operation. We would like to expand this operation aggressively as an assembly plant for small motor products.

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July 29, 2011 16

Construction of multi-purpose factory in Lop Buri

Location: Lop Buri, Thailand (site of a planned but stopped pivot assembly factory) Building area: 19,000㎡ Expected to complete: January 2012 (2 months quicker than normal) Specifics: transfer motor parts production lines from existing buildings Rendering of the new factory

Utilizing open space in Lop Buri factory complex

• Expand LED backlight production capacity by May 2012 due to rapid

expansion of smart phone market Minebea’s total capacity will be 35 million units / month in FY March 2013

• Expand rod-end bearing production capacity

We plan to build a new multi-purpose factory building in Lop Buri, Thailand where we originally planned but stopped building a pivot assembly factory. By utilizing already-done land preparation, it will take two-month-shorter than a normal construction period. This building is to house motor production lines to be moved from other buildings in the Lop Buri factory complex. Open spaces to be created by that will be utilized to expand our LED backlight production and rod-end bearing production in Lop Buri. As smart phone markets flourish, our LED backlight order intake is growing rapidly. In addition, we have secured large orders recently, which require us to expand our production capacity quickly. We plan to bring these new production lines in operation in May 2012, to increase our total production capacity to 35 million units per month. We also plan to expand our rod-end bearing production capacity in Lop Buri to meet demand and lower production costs, as the commercial airplane market grows steadily. We will continue to focus on growing markets and invest aggressively if necessary.

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July 29, 2011

Any statements in the presentation which are not historical fact are future projections made based on certain assumptions and executive judgment drawn from currently available information. Please note that actual performance may vary significantly from any particular projection due to various factors. Factors affecting our actual performance include: (i) changes in economic conditions or demand trends around Minebea; (ii) fluctuation

• f foreign exchange rates or interest rates; and (iii) our ability to continue R&D, manufacturing and marketing in a timely manner in the

electronics business sector, where technological innovations are rapid and new products are launched continuously. However, this is not a complete list of the factors affecting actual performance. All the information in this document is the property of Minebea Co., Ltd. All parties are prohibited for whatever purpose to copy, modify, reproduce, transmit, etc. this information regardless of ways and means without prior written permission of Minebea Co., Ltd..

Minebea Co., Ltd.

Business Results

http://www.minebea.co.jp/

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