Presentation Transcripts

Hello, I'm Yoshihisa Kainuma.
First off, I'd like to go over the highlights of today's presentation.

First quarter performance significantly improved although it's difficult to make a year-on-year comparison with last fiscal year when we conducted a PPA for ABLIC and had other factors to deal with. We went against headwind of soaring material prices, a shortage of semiconductors, and a slowdown in supply chain operations due to COVID-19, but I feel that we were able to make significant headway due to favorable foreign exchange rates and the fact that business segments were performing well across the board.

The machined components segment saw its operating margin pick up substantially, and its operating income target of 50 billion yen a year will be well within reach once the aircraft-related business bounces back. While pivot assembly sales are declining, we plan to make an additional capital investment since overall demand for miniature and small-sized ball bearings is way up. I'll go into further detail about that later on.

Semiconductor sales are still booming, and by the end of the first half, operating income is likely to reach 10 billion yen, which was our annual target just a couple of years ago.

Now here's some good news about U-Shin. Note the text in red that says, "large projects." This is about us having become the first vendor to a giant automaker for its 10-year door handle business worth approximately 100 billion yen. This has probably astonished door handle manufacturers around the world. One of the reasons for acquiring U-Shin was that I was sure the acquisition would generate lots of synergy. I also knew that our motors, analog semiconductors, and antennas would play a big part in the door handle business that will see a shift to electrification. I'm glad customers are beginning to fully realize that we have a global supply chain network and the ability to handle large volume orders like this one, and happy that we won this new contract. It goes beyond door handles, and in fact Chinese and other leading automakers have been increasingly adopting our compact spindle drives (CSDs) for their hatchbacks. The gears turn slowly in the automotive business, but you can see that we are making progress in the right direction.