Presentation Transcripts

Now let's take a look at the results by business segment, starting with machined components.
On the left is a bar graph for yearly sales trends and on the right is a bar graph for the operating income along with a line chart for the operating margin.
You can see net sales jumped 13% for a record high total of 176.4 billion yen. C&A Tool Engineering and Mach Aero, which were just consolidated in the third quarter, fall under the machined components segment's category of "Other."
Sales of ball bearings increased 13% to reach 105.9 billion yen. This uptick was fueled by strong demand across a wide range of industries with ball bearings for automobiles and fan motors used in data center servers making up the bulk of shipments as the average monthly external sales volume rose 11% to reach 190 million units. Revenue from rod-ends and fasteners was up 8% from the previous fiscal year to total 31.9 billion yen while revenue for pivot assemblies fell 3% from the previous fiscal year to total 31.5 billion yen. Our ability to hold on to over 80% of the market share has guaranteed stable earnings.
Operating income came to a record high of 42.7 billion yen in the fiscal year ended March 31, 2018 as the operating margin hit 24.2% for a 9% year on year increase in operating income and a 0.8 percentage point decline in the operating margin.
If we were to exclude the 0.7 billion yen of PPA impact, operating income would total 43.4 billion yen and the operating margin would be 24.6%.
Looking at the results by product, we see that profit of ball bearings and pivot assemblies increased year on year while profit of rod-ends and fasteners dipped slightly.
In the fiscal year ending March 31, 2019, we anticipate a jump in sales of ball bearings due to the continued increase in external sales volumes and an improvement in the profit margin resulting from the reduction of special expenses such as air freight charges. We also expect to see higher sales and profits for rod-ends and fasteners as well as lower sales and profits for pivot assemblies as the HDD market continues to shrink.
C&A Tool Engineering has been included in ball bearings, and Mach Aero has been included in rod-ends and fasteners beginning this fiscal year.