Investor Relations | IR Events | Performance Briefing

[ 2nd Quarter of fiscal 2014 Performance Briefing ]2Consolidated First Half Results of FY March, 2014
Consolidated Full Year Projections of FY March, 2014

Mr. Takehiro Kamigama

Mr. Takehiro Kamigama
President & CEO

Thank you very much for joining us today. First, the consolidated first half results of FY March 2014 as well as the annual projections for March 2014.

Consolidated First Half Results of FY March, 2014

For the consolidated first half results of FY March 2014, net sales were 484.7 billion yen; operating income, 16.8 billion yen; income before income taxes, 17.7 billion yen; net income, 6.4 billion yen; and earnings per share, 50.90 yen. For exchange rates, to the dollar, 98.88 yen; and to the euro, 130.03yen. Due to the sensitivity of the FX, net sales were about 83 billion yen of profits for net sales and 13 billion yen of that was incremental operating income.

Basic Strategy

For basic strategy, in March 2013 we completed restructuring centered around passive components and in March 2014 we will proceed with business portfolio optimization as well as the consolidation of production facilities. We will complete the major reconstruction efforts by the end of this fiscal year. Starting from next year, we would like to change gears and get into more growth strategies. For passive components, we would like to position it as a growth driver and pillar of profit to help resuscitate the business. For magnetic application products (recording devices), although HDDs have been struggling, the total value and volume of the business is stagnant but we will try to make it a core part of the business. For film application products (rechargeable batteries), with the expansion of the demand and scope of this business, we would like to nurture it into the next core business. Polymer batteries are used in tablets for example, and we expect to grow by more than 20% in the next few years.

Operating results

As for historical business performance, due to yen depreciation our revenue has been steadily growing. In Q2 it was about 12.4 billion yen, and we can have further additional profits on top of that in Q3.

FY March 2014 1H Segment Highlights

For the highlights of each of the business units in the first half of March 2014, first for passive components, the net sales was 236.6 billion yen while the operating income was 9.0 billion yen. The high frequency devices were profitable in the single month of September. We would like to further increase this profitability. For magnetic application products, the net sales was 179.1 billion yen while the net income was 12.4 billion yen. The shipment of HDD heads decreased, however, we were able to secure the operating profit as expected. The issue is that the magnetic segment caused this result. For film application products, the net sales was 60.1 billion yen while the operating income was 5.1 billion yen and this is mainly from rechargeable polymer battery products. The service for smartphones and tablet handsets has been quite solid, and we would like to see further growth in this area. With respect to non-core businesses, we have decided to withdraw from the data tape business, including the Blu-ray, which is going as planned.

Full Year Projections of FY March 2014

Regarding the consolidated profit forecast for FY March 2014, the numbers that we announced earlier have not been changed. Foreign exchange has been maintained at 90 yen to the dollar and 118 yen to the euro. Sales are at 930 billion, operating income at 30 billion, and net income at 13 billion.

Dividends Forecast of FY March 2014

As for outlook dividends forecast for FY March 2014, it also remains unchanged. Interim dividends per common share was 30 yen, year-end dividend is expected to be 40 yen, so 70 yen would be paid as a result for the year. That concludes my presentation.