MINEBEA MITSUMI Inc. (6479) Earnings Call Transcript & Summary

Thank you very much for participating for the business results, fiscal year ended March 31, 2023, for MinebeaMitsumi despite your busy schedule. Let me introduce today's participants. From your right, Representative Director, Chairman, CEO; Yoshihisa Kainuma; Director, President, Executive Officer, COO and CFO, Katsuhiko Yoshida; COO, CFO Office, Corporate Management, to present Hidenori Shimosako. I will be serving as the moderator for today. I am from the PR/IR office. My name is [ Kowata ]. First of all, Yoshida will talk about the financial performance. And after that, Kainuma will talk about the management policy and business strategy. After that, we'll go into Q&A. We will end this meeting at 7 p.m. As we have introduced to you beforehand, from this time, based on the environmental policy of MinebeaMitsumi Group, we have stopped distributing the paper material for presentations. We'll be asking for your cooperation to answer to the questionnaire. Okay, excuse me, to utilize the QR code, which is on the upper right-hand side of the questionnaire paper. And please cooperate and answer a questionnaire. Today's presentation, including Q&A, is live stream on the Internet. We are recording this meeting so that people can watch this afterwards on the website, so please understand that. Please refrain from shooting photos or recording the audio from your side. Thank you very much. Then Mr. Yoshida, the floor is yours.

So, my name is Yoshida. Today, I would first like to explain the consolidated financial results for the fiscal year ended March 31, 2023. Consolidated net sales for the fiscal year ended March 2023 totaled JPY 1,292.203 billion, while operating income reached JPY 101.522 billion. And profit for the period attributable to owners of the parent hit JPY 77.010 billion. This is a year-on-year increase of 15%, 10.2%, 11.7%, respectively, for net sales, operating income and profit for the period attributed to owners of the parent sector. And for the other items, including net sales and operating income, et cetera, we hit a record high. Net sales increased for 11 consecutive terms. Operating profit increased for 2 consecutive terms. Foreign currency exchange rates are estimated to have a year-on-year impact of plus JPY 157.9 billion in net sales and plus JPY 29.1 billion in operating income. Operating income includes JPY 14.5 billion of special factors. More details of the special factors will be provided later. Moving on to the next slide. Consolidated net sales for the fourth quarter of the fiscal year March 2023 was up 17.3% year-over-year and down 8.5% quarter-on-quarter to total JPY 339.718 billion. Operating income was up 58.9% year-on-year and up 30.3% quarter-on-quarter to reach JPY 34.441 billion. Profit for the period attributable to owners of the parent increased by 2.1x year-on-year, and increased by 2.5x quarter-on-quarter at JPY 33.068 billion. Net sales hit a fourth quarter record high, and operating income hit a quarterly record high as well. We estimate that foreign currency translations have a year-on-year impact of plus JPY 33.6 billion in net sales and plus JPY 4.1 billion in operating income. Quarter-on-quarter impact was minus JPY 17.8 billion in net sales and minus JPY 4.8 billion in operating income. Operating income includes JPY 20 billion of special factors. More details of the special factors will be provided later. Please turn to the next slide. This is the annual trend in net sales, operating income and operating margin. The bar graph on the left is net sales, and the one on the right is operating income along with a line chart for the operating margin. The operating margin for March 2023 was 7.9%. This was down 0.3 percentage points year-on-year. Next slide, please. Since there were several special factors such as onetime costs and onetime profits in this fiscal year, we will use this chart to organize them. Firstly, operating income was estimated at JPY 102 billion in the initial forecast, we announced in May last year. Compared to this, there was a gain on the sales of the former Tokyo headquarters and others as a onetime profit of JPY 40.4 billion and onetime cost of structural reform cost of minus JPY 17.2 billion and ForEx forward contract, minus JPY 8.7 billion. Excluding these special factors, we estimate that the downside of the business was JPY 15 billion. It means that operating income on the business basis, excluding the special factors, was JPY 87 billion. Moving on to the next slide. This is for the quarterly trend in net sales, operating income and operating margin. The operating margin for the fourth quarter was 10.1%. This was up 2.6 percentage points year-on-year and up 3.0 percentage points quarter-on-quarter. Breakdowns of special factors for each quarter of this fiscal year are shown in the boxes for your reference. Please go to the next slide. We have changed the names of the business segment since April 2023. By matching the name and the reality of the segment, we will improve understandability and enhance corporate value. The Machined Components, Electronic Devices -- it will be PT; Electronic Devices & Components will be Motor, Lighting & Sensing, MLS; MITSUMI Business would be Semiconductors & Electronics, SC; U-Shin Business will be Access Solutions, AS. There is no changes made to the operation of each business segment. Both the new and old names will be shown on the following slides. Next slide, please. This slide shows the difference between the forecast as of February and actual results for net sales and operating income by business segment for the fourth quarter. Net sales for the Machined Components business were higher than projected, mainly due to steady sales of bearings and aircraft components. In the Electronic Devices & Components business, although sales of HDD motors fell short of forecast, overall sales were higher than projected, thanks to steady sales of other motors and LED backlights. The MITSUMI Business experienced lower-than-expected sales mainly for optical devices. And sales for the U-Shin business were generally in line with the forecast. Operating income for the Machined Components business and the Electronic Devices & Components business were generally on track with the forecast if these special factors were excluded. Operating income for the MITSUMI Business fell below our forecast due to the special factors and declined revenue associated with the slowdown in the optical device sales. The U-Shin Business' operating income was less than projected due to deterioration in regional product mix, even if we excluded the special factors. Next slide, please. Now let's take a look of the results by segments, starting with Machined Components, renamed Precision Technologies segment. On the left is a graph indicating yearly net sales trends, and on the right is a graph with a bar chart showing yearly operating income trends along with a line chart for operating margins. In the fiscal year ended March 2023, net sales were up 11.2% year-on-year to total JPY 197.3 billion. Sales of ball bearings increased 14.2% year-on-year to reach JPY 146.2 billion. The monthly average of bearing sales volume totaled 226 million units for a decrease of 5% year-on-year. Looking at sales by application, we see that sales for products for automobile applications increased, while sales for those for data centers and home electronics declined. Sales of rod-ends and fasteners were up 30.4% year-over-year to total JPY 35.2 billion, is recovering steadily from the effects of COVID-19. Sales of pivot assemblies decreased 29.3% year-on-year to total JPY 15.9 billion. Operating income for the fiscal year ended March 2023 totaled JPY 43 billion, including the operating margin at 21.8%. We saw operating income decreased 6.1% and the operating margin declined by 4 percentage points year-on-year. Looking at the year-on-year results by product, we see that the operating income for rod-ends/fasteners well rose, while operating income for pivot assemblies and ball bearings declined. If the impact of special factors such as for its forward contracts or to reform costs were excluded, operating income for the fiscal year fiscal March 2023 would have decreased 1% year-on-year and operating margin would have decreased 2.9 percentage points year-on-year. For the fiscal year ending March 31, 2024, we expect sales of ball bearings to increase due to gradual recovery for demand for automobiles and demand for service is expected to recover from the second half of the fiscal year. And our aircraft-related businesses, including rod-ends and fasteners, we expect full-scale recovery in the second half of this fiscal year. For pivot assembly, we also expect recovery of demand in the second half of the fiscal year. Please go to the next slide. This slide shows the quarterly trends. Fourth quarter net sales decreased 2.7% quarter-on-quarter to total JPY 49.1 billion. Sales of ball bearings decreased 6% quarter-on-quarter to total JPY 35.3 billion. Their monthly external shipment volume was down 8.2% quarter-on-quarter for an average of 206 million units. This was due to the slowdown in the market, mainly for data centers. Sales of rod-ends and fasteners totaling JPY 9.8 billion were up 2% over the previous quarter. Sales increased with the recovery of aircraft production. Sales of pivot assemblies increased 21.5% quarter-on-quarter to total JPY 4 billion. Operating income for the quarter totaled JPY 8.7 billion, and operating margin was 17.7%. On a quarter-on-quarter basis, operating income decreased 24.9%, while the operating margin dropped 5.2 percentage points. Looking at the results by product, we see that operating income for ball bearings and pivot assemblies decreased quarter-on-quarter, while operating income for rod-ends and fasteners was increased compared to the previous quarter. These include the impact of special factors as noted earlier. Please go to the next slide. Now let's look at the Electronic Devices & Components segment, renamed Motor, Lighting & Sensing segment. In the fiscal year ended March 2023, net sales were down 1.3% year-on-year to total JPY 366.3 billion. Looking at the results by product, we see that the sales of the motors increased 2.2% year-on-year to reach JPY 272.9 billion. This increase was due to steady sales of motors, are mainly for automobile, all the motors for HDDs have slowed down. Electronic devices, the sales were down 19.7% year-on-year to JPY 51.6 billion. Net sales of sensing devices totaled JPY 37.5 billion, increasing 5.9% year-on-year. Operating income was JPY 0.9 billion with the operating margin of 0.3% compared to the previous fiscal year. Operating income decreased of 95.7% and the OP margin declined 5.5% percentage points. Looking at the results by product, we see that operating income for motors, electronic devices and sensing devices will decline -- all declined. If the impact of special factors such as FX for contract structural reform costs and others were excluded, operating income for March 2023 would be an increase of 45.3% year-on-year and the operating margin declined 2.6 percentage points year-on-year. In the fiscal year, in the March 2024, we expect increases in both sales and operating income promoters due to gradual recovery in demand for automobiles and the recovery in motors for HDDs through the second half of the fiscal year. For the electronic devices sales will be almost flat, but operating income is expected to slightly decrease. Sales and operating income of sensing devices will be almost flat. Next slide, please. This slide shows the quarterly trend. Net sales increased 6.1% quarter-on-quarter to total JPY 96.2 billion. Looking at the results by product, we see that sales of motors increased 12.2% quarter-on-quarter to reach JPY 73.4 billion. This is mainly due to the recovery in the demand for HDD motors. Sales of electronic devices were down 15.6% from the previous quarter to total JPY 12 billion. This is due to seasonality of LED backlight models used by our key customers. Sales of sensing devices totaling JPY 9.3 billion were down 5.8% from the previous quarter. Operating income came to JPY 4.6 billion and the operating margin was minus 4.8%. On a quarter-on-quarter basis, operating margin dropped 6.9 percentage points. These include the impact of the special factors as noted earlier. Next slide, please. Let's look at the performance of the MITSUMI business segment, renamed Semiconductors & Electronics segment. Net sales increased 23.6% year-on-year to total JPY 530.5 billion, in March 2023. This is mainly due to increased sales of optical devices. Operating income came to JPY 42.7 billion, and the operating margin was 8.1%. These figures represent 2.1% year-on-year increase in operating income and 1.7 percentage points year-on-year, a decrease in the operating margin. Operating income for optical devices, mechanical components and power supplies increased while other business saw a decline. If the impact of special factors such as negative goodwill for semiconductor, structural reform costs and FX forward contracts were excluded. Operating income for the fiscal year ended March 2023 would be an increase of 14.3% year-on-year, and the operating margin declined 0.8 percentage points year-on-year in the fiscal year ending March 2024. Both sales and operating income in optical device and semiconductors and expected to remain steady. Overall, we anticipate a slight decrease in both sales and operating income due to an expected decrease in sales and operating income in mechanical components. This slide shows the quarterly trends. Net sales decreased 32.3% quarter-on-quarter to total JPY 123.6 billion. This was due to decreased revenues accompanied by seasonality of optical devices and mechanical components, et cetera. Operating income totaled JPY 0.6 billion, while the operating margin was 0.5%. Operating income decreased to 96.5% and the operating margin declined 9 percentage points quarter-on-quarter. These are due to a decline in operating income as a result of lower sales of optical devices and mechanical components as well as the special factors noted earlier. Finally, let's look at the U-Shin Business, renamed Access Solutions segment. Net sales increased 33.7% year-on-year to total JPY 194.7 billion in March 2023. This is due to a recovery in sales to the automotive industry in addition to the performance of Minebea AccessSolutions, formerly, Honda Lock, which became our consolidated subsidiary as January 27. Operating income came to JPY 22.3 billion, and the operating margin was 11.5%. These figures represent 30.5x year-on-year in operating income, 11 percentage point year-on-year increase in the operating margin. If the impact of special factors such as structural reform costs and negative goodwill for Honda Lock were excluded, operating income for March 2023 would be 2.8x growth year-on-year, and the operating margin would be 0.6 percentage points up year-on-year. In the fiscal year ended March 2024, we expect an increase in sales and operating income due to the impact of business integration and recovery of automobile production. Next page, please. This slide shows the quarterly trend. Net sales increased 50.1% quarter-on-quarter to total JPY 69.5 billion. This was due to the addition of Minebea AccessSolutions result, as noted earlier. While our operating income totaled JPY 21.7 billion and the operating margin was 31.3%. Operating income increased 83.9% and the operating margin rose 30.7 percentage points quarter-on-quarter. These include the impact of special factors as noted earlier. Next slide, please. The bar graph here shows the full year trends in profit attributable to owners of the parent, while the line graph chart changes in the profit for the period partial. The profit for the period was JPY 77 billion. Earnings for the period per share was JPY 187.6. The profit for the period and earnings for the period per share hit record highs. Next slide, please. The bar graph here shows quarterly trend in profit attributable to owners of the parent, while the line graph chart changes in the profit for the period per share. The profit for the period was JPY 33.1 billion. Earnings per share was JPY 80.6. Both quarterly profit and earnings for the period per share hit quarterly record high. Next slide, please. Next, we have quarterly inventory trend. At the end of the fourth quarter, inventory totaled JPY 263.1 billion, which is JPY 12.8 billion less than what it was 3 months ago. This is mainly due to the strategic operation controls in ball bearings, spindle motors and others. Next slide, please. This graph contains a bar chart showing trends in net interest-bearing debt, which is the total interest bearing debt minus cash and cash equivalents and the line chart indicating free cash flows. At the end of the third quarter, net interest-bearing debt totaling JPY 201.7 billion, was up JPY 114.7 billion from the end of the previous fiscal year. This was mainly due to the purchase of the new Tokyo headquarters related expenditure. And the expenditure associated with M&As and increase in working capital due to higher inventories et cetera. At the end of the fiscal year, ending March 2024, the cash position is expected to improve, thanks to the strong ability to generate the cash. Next slide, please. This is a summary of the forecast of the fiscal year ending March 2024. This fiscal year, we expect to achieve a new record high in sales. Although net sales are expected to decrease in mechanical components, growth in bearings and motors, and access products and business integration of Minebea AccessSolutions will make up for it with overall net sales expected to increase to JPY 1,450 billion. Operating income are expected to increase in Precision Technologies, Motor, Lighting & Sensing and Access Solutions in anticipation of a market recovery from the second half of the year. We assume that operating income, excluding special factors, will increase compared with JPY 87 billion for the fiscal year ended March 2023 as noted earlier. The exchange rate is assumed to be JPY 130 to USD 1. Next page, please. This slide shows the forecast by business segment. This is the end of my presentation. Next, Chairman, Kainuma, please.

So from my side, I would like to explain about the management policy and the business plan and outlook. So I think you can just go through this. So this was the summary of the last fiscal year. So currently, if you look at the situation, smartphones, storage-related businesses and automotive sector, we -- in terms of -- we have not seen a powerful recovery trend in these markets. I think they're just going through adjustments. So in the second half of this year, whether they're going to recover or not, it all depends on how the new businesses or new products can be introduced in terms of storage. I think without mistake, this will start to see recovery. And according to the news reported, ChatGPT, the graphic Micron has to be used. So this new storage demand is starting to emerge. For automatic, gradually, the semiconductor shortages and supply chain disruption has started to be resolved. So gradually, the -- in terms of volume, basically, the OEMs going to increase their volume output. So basically, they were focusing on trying to produce high-end automobiles as quickly as possible, and they were not able to catch up in terms of volumes. However, gradually, we think that the situation is going to recover. So against this context, inventory reduction in the supply chain is going to take a bit more time. But the -- in terms of post adjustment, after the adjustment has ended, what type of picture can we draw? I think that will be the most important factor. So today, what I want to stress to you is that from our point of view, growth is going to accelerate for our company. So the launching pad has been completed at last. That is my point. And that is what I want to communicate with you. So this 8 spears products and the integration products without fail is going to serve as a driver. That is the picture that I want to show to you. So this is fiscal year's forecast. So it's very easy to give you grant numbers, but I think we should be conservative. Because the current situation is as such, as I have explained, the JPY 100 billion of OP, I wanted to give you that type of number, but I hope that you -- I will be giving you concerned numbers, and I hope that you understand. If you look at the speed of recovery, and if there is a change of the outlook, in a timely manner, we will communicate that with you. And I think that's the best way to do so. So in terms of the recovery, if that is quicker than we have expected, then achieving this JPY 100 billion will not be unexpected, so to speak. So looking at this diagram, since I became the President, I have put in the numbers and the current 3-year plan is reflected in this graph. But I wasn't aware of this at all, but I realized it for 10 years in a row, we have been able to have record sales for 10 consecutive terms. Of course, there are various factors behind this. ForEx is one factor. That's -- if it changes, product mix changes. And to be frank. So in terms of the subcore products, there is a type of the products, the supplied proponents. And so we buy these products that are supplied and then we put on products to assemble that and we deliver to the customers. So that is effective in ourselves. That's true. However, that said, if we're doing this for this business 10 years and accounting standards has changed. So there are various factors that are reflected. But the bottom line is that we have been able to achieve 10 consecutive record sales and for '24 M&A deals are included in this. So in terms of this growth trajectory in this 14 years has become quite clear. And what I have running this business, and I thought it was amazing is that, when I became a President, this rather than the Access Solutions business, it was JPY 230 billion. So it was a small company. So even if we increase the sales about 10% and then it was JPY 240 billion, but it's more than JPY 1 trillion, there's JPY 1.3 trillion. Well, 10% is JPY 130 billion. But in this 3-year plan that is shown here, even looking at this year, basically, if you round up the numbers, JPY 1,500 billion is going to be achieved. So this 10% -- growth of the 10% magnitude is completely different from 10 years ago. And I think we are at a completely different stage. So going forward, our growth is going to accelerate going forward. And more than ever, maybe people will say that the operating profit is not growing. But if you don't have the sales, operating profit will not grow. But the sales is actually accelerating. So we have the supply parts from the customers and the Access Solutions business is basically not contributing to the profit. If you exclude those type of businesses, 10% operating margins are really achieved. So I think -- or if the operating profit growth is achieved. So this is our focus. And when there is a turnaround it means that a large return can be expected, because we have the sales out there. So this is the mid-term business plan and the breakdown of the business plan. So internally, I say the real operating margin, I used the word real operating margin, because if you look at a long-term perspective, so we have this. In some cases, we had to reflect the supplied parts business under sales. If you exclude that and we're trying to achieve 15%, let's achieve 15%. So that has been a new target internally. Well, I was just beginning to be on the role and then I had to change the microphone, but excuse me. But in any case, so actually can we realize this with the bearing business, ball-bearing business is kind of a plateau. But I'm going to mention it later. But it's going to grow going forward. And the airplane business -- aircraft business is going to recover. The next driver is going to be mentioned later, but semiconductors. So JPY 100 billion is clearly in the site. So if you achieve JPY 100 billion, it means that we have become the top 10 analog semiconductor manufacturers. And currently, nobody is watching us. That's the reality. But from our point of view, we want to be a global niche top. In a certain area, we become a top player. About 50% of our sales is coming from the global niche products. So under the same logic, the semiconductor -- if you could focus on the semiconductor, that's what we can achieve for the automotive-related business for motors. There's a lot of inquiries coming. So that's the reason why we can show you the start. In terms of sales, we have -- I have not mistaken a projection of the sales for these past 10 years and with respect sales, we have been able to achieve the operating income. There has been some fluctuations. Overall, we have been able to grow, of course. But because there's a lot of factors that we have to consider. But that said, if the recovery is in place, and we have the launching pad. And if you look at the 8 spears products that are lined up there, and if they are able to achieve a certain level of sales, this real operating margin, 15%, I think we will be able to achieve that. So there are 3 slides that is actually the backup and the reason that I say I can achieve this. So what are the drivers? So the 8 spear products. Bearings, motors, analog semiconductors, and now it's not making any contribution to the profit, but what is most promising is Access Products. But of course, sensors, connectors and power suppliers will follow them and grow going forward. Let's take CASE, for example, automotive products. So we have so many products that can be a global niche top product. And if you look at each and every one of them, each one is very unique and interesting. And the degree of growth, they are expected to grow dramatically in niche areas. So our combined strengths will be capitalized on in order to maximize profit. Finally, so I have been talking about [ SOGo ] or combined strings and you may be wondering what I mean by that. But finally, we are visualizing the future for these products. For example, HVAC. Then the 6 million units of monthly production is anticipated. So growth will keep growing and by horizontally deploying them, the number is expected to grow further. And LiDAR, Fortunately, the European customer has decided to adopt our product. And going forward, this will be adopted by many more models, horizontally, semiconductors, motors, bearings and connectors, software, those things together will demonstrate our capability and strength. Here, you cannot see the details, but Flash handle, as you may be aware. This one started -- the mass production started in 25th year -- the mass production will start in 2025 and JPY 100 billion. So this combined strength is now installing into the market. So the steady increase can be now plotted on the graph. So JPY 2.5 trillion is the target. But by any means that this is an achievable numbers. Bearings is now at the scaffold. But we have created a capacity. When the demand comes back, we will be able to ship the product anytime. And the aircraft, we still have supply chain issues, but as we imagined, the aircraft business is coming back. So from push to pull the major aircraft manufacturers have given us an award. In other words, our delivery time was very accurate. So it's almost done. But how the area of bearings is going to grow? I would like you to take a look at it later on. MEMS, as I said, the automotive motors -- we have so many inquiries. And our designers are responding to each inquiry generating results. And the resonant devices will be adopted in many products. And the backlight, not just mobile phones, but automotive, but major automotive OEM is very close to make a decision to use our product. And OLED, for automotive is something for a distant future, according to what I heard. And the backlight technology are a patented technology in '25 -- 2025 or 2026, we will be seeing more of those. And Semiconductors & Electronics, forma MITSUMI. Fortunately, has been able to renew the record in profit. In the past, I have been reported that it would exceed the JPY 50 billion, which I think was a major challenge. But unfortunately, in the second half, it lost speed and actuators, OIS, semiconductors, game consoles, not just those, but the conductors and power supplies will start contributing to profit. So this is the major topic for today. Semiconductors will be our major driver going forward. But of course, MITSUMI and ABLICs, the combined strength. That is true for the products as well. And what each will be doing? The proper segmentation and the proper strategy formulation have been completed. MITSUMI, the power semiconductor suitable for mass production, IGBT and SiC, will be handled by MITSUMI. That is the basic plan. By doing so, MITSUMI semiconductors will become even larger. And on the other hand, ABLIC has always been good at making a small lot of many products. But SSC, which is a semiconductor design house. What they are targeting at is the highly integrated product, analog front end. So the automotives will be using sensors while it's driven. And the analog signals can be instantaneously converted into digital. So highly integrated circuits. In other words, the microcomputer type functions are embedded. And the CPU behind that, the signals can be transmitted in the manner that is easy to be processed. And by 2030, the JPY 70 billion sales, so only for AFE, highly integrated AFE can target such sales. And it's very -- it's been very well received by customers. And I think there is a high probability that both are sort of staple foods in industrial products. So the next staple food will be analog semiconductors, global niche, the mass production. We are not intending to compete against the giant but we will fine-tune our products, capitalizing on our characteristics. And we will be selling those products to the customers who highly evaluate our abilities with a certain level of margin. So this is Access Solutions. This is our biggest challenge. Because the customers are not making as many as we thought. And Minebea Solutions -- from our Minebea Solutions are working hard. But if these things work, we will be able to see a turnaround. And it's already foreseeable. And Iwaya is now dedicated to Access Solutions. And every month, he's visiting Mexico or Europe, Brazil, Mexico, the U.S. So he's essentially traveling around the world. So Access Solutions business. In order to make Access Solutions business value-added one and the products that we should be obtaining the global niche like German, spindle motor, players and the engineers, some of them are now transferred to Access Products. In Germany, the former U-Shin, and [ Valeyo ], former Valeyo, the engineers from former [ Valeyo ] are working together to develop handles capitalizing on the combined strengths. So going to the environmental initiatives, I hope that you'll take a look at this later. But from our point of view, as you've seen on the lower right-hand side. So we are taking this very seriously to reduce the burden on the energy and we will -- and realizing these. So with the local government and for the top people of the local government, I directly are engaged with them and conducting lobby activity. And getting the support of the top local government, we want to offer -- or execute the ideal execution. So it's the first time that I'm going to face-to-face in 3 years. So this Tokyo X Tech Garden, the employees evaluate this highly, and there's a lot of exchange that is happening. And we have a lot of initiatives to accelerate this exchange within this building. So I think without a fail, this will be a source of strength for us. But for about 3 to 4 years, and maybe 4 to 5 years the [indiscernible] and wheel evaluation will be given out. So I will be the CEO and Chairman. So I'm 67 years old. And gradually, I have to consider my succession plan. So Mr. Yoshida is 7 years younger than me. And he graduated from university and he immediate came over to our company. So even more than me in terms of the human resources of this company, he knows more than me. And this time around, Mitsumi's President is Iwakuma, who actually came is [indiscernible] Mitsumi. He's Executive Officer, but he's going to be a Managing Executive Director, but he is going to lead Mitsumi and lead Mitsumi with excellent capabilities. Because our company has become larger, if you look at the vertical line on the left is what I have this internally. So this is my type of company philosophy, company credo and management strategy and then execution items are decided. How this execution strategy is going to be compiled and then put into action? So this is the kind of a system that I always have inside me. And basically, I have been in charge of this all the time. And of course, I delegated to my subordinates and ask them to do this. But if -- I'm a pure CEO, it's basically from the strategy in terms of the actual execution, I will leave it to the COO. But I can't leave everything suddenly to Yoshida. There are things that I myself not -- only myself can do. Of course, there are things that are out there. So with those type of items or strategies, even basically, in some cases, I have to be gained for the actions of executions because we have not yet achieved JPY 2.5 trillion. So in the future, you can see this graduation or the colors becoming lighter. So gradually, but gradually in terms of the execution side of this business, gradually, I would delegate that to the COO in the future. So thank -- thankfully, the dividend is JPY 40. We went in into the company of JPY 7. So maybe you are not satisfied, but we are connecting M&A, we are buying back our shares. So this would be the level of dividends that we will be forecasting this year. That's all for me.

Next, we'll go into the Q&A session. [Operator Instructions] So the person in the front row. Daiki Takayama from Goldman Sachs.

First of all, let me confirm the numbers. So JPY 100 billion operating profit, which was announced after Q3. So please explain more about the positives and negatives about the guidance. So it's JPY 20 billion less because of the structural reform, was it about the same? So the comparison post the Q3, the positives are JPY 40 billion and negative JPY 17.2 billion, net JPY 23 billion, excluding the FX forward.

And responding to your question, the structural reform, JPY 20 billion, as we explained. So that was JPY 17 billion. So it wasn't as much as JPY 20 billion. On the other hand, the revenue was about in line with the assumption. I mean, the profit was in line with the assumption. I see. So in real term, the results vis-a-vis the plan. So this amount which was not used for the structural reform is a positive. So JPY 20 billion and JPY 102 billion, so JPY 3 billion was for the organic part, excluding the special factors, a slight downside. I see.

And my second question is about the second half. The plan for the second half. In the latter half of the slide deck, I think it was like Page 24. So JPY 67 billion is the operating profit for the second half, excluding the Precision, the profit seems to be inclined towards the second half. So how well the company does in the second half will prepare the platform for the next year? So can you talk more about the probability of achieving that in the second half, particularly Access Solutions, JPY 1.5 billion to JPY 8.5 billion and the Motor, lighting and sensing. So it depends on the improvement of the margin? And then the improvement in the margin of the semiconductor will be another major factor. Can you elaborate on that, please?

Right now, the Q4, which has been finished. We control the operation which is reflected on the decrease of inventory. So we posted a pretty big sales, but the operation was controlled. And that trend will continue going forward and data center demand adjustment is still continuing. In addition, the smartphone seasonality, it was at the low level in Q1 and reduce the production of the -- all the models of the smartphones also affected. And the Q1 more than the sales, we are adjusting the operation. Likewise, the automotive production is likely to normalize in the second half. And the data center adjustment will probably normalize to some extent. And business environment right now, there are the positives and negatives. But if those things normalize, I think we will be able to achieve the plan in the second half.

And your question about the motors, HDD motors, we are still making a major adjustment. And other than that, automotive motors, as Kainuma explained a while ago. So automotive models are being renewed one after another. And the number of motors used per unit is increasing. And that is expected to increase even more in the second half. So first half and the second half, there will be a huge difference in the second half. On Access Solutions, China -- the reduction in sales of automobiles in China or the inventory adjustment is having a major impact, but it is likely to be resolved after the first quarter. And the automotive market recovery is anticipated. Therefore these numbers are not unachievable.

Lastly, I would like to ask this question to Mr. Kainuma. So industry recovery and now profit to be generated in the first half and second half, I understand that it depends upon the external factors. But -- what are the areas that you became very confident for generating a much bigger profit? And on the other hand, what are the areas that you think there is still a huge room for improvement?

I don't know if you believe me or not, analog semiconductors and Access Solutions will be the next drivers for recovery. I am confident about that. Why I can be so confident, you may be wondering, but the former U-Shin related business like Europe -- Europe automobiles are recovering. And in May and June, it will turn profitable. That is what I have been reported recently. So if things like this accumulate a little by little, so turning profitable -- so we will see more of such things. And therefore, Access Solutions will be very interesting, because this much sales it has. I mean there are so many areas that can be improved. So it's never hopeless rather we can challenge many things. It's like a treasure box. Next, analog semiconductors, I cannot share with you the details, but that we have been working on many things. It's about time for them to bloom. In the second half of this year, what we ordered last year and year before the machine tools will be delivered IGBT, I mean we are not able to make enough of them. And Yasu is making losses, double digit -- double-digit losses. And yet, it's been offset and MITSUMI is generating profit. So if Yasu starts making contribution to profit, we will see a totally new picture. And these things -- these 2 things are really interesting. And there are nothing that I do not know what to do with. I mean, I've never felt that way. I always believe that there is something I can do. So at this point in time, there are nothing that I do not know what to do.

So let's go to the next question. Shoji Sato, Morgan Stanley Security.

So I have 3 questions from my side. First is about the former MITSUMI, the major products from FY '21 to FY '22, how do they change? And for this fiscal year, what type of change are you anticipating? Can you elaborate on this? That's my first question.

From FY '21 to FY '22 and FY '22 to FY '23, is this what you're asking? Yes. Then for FY '21 to FY '22, sales. So this is JPY 429.1 billion to JPY 530 billion. So JPY 41.8 billion to [ JPY 47.8 billion ] in profit has increased. In terms of the reason why the sales has increased this much is that optical devices that has been the major contribution. So for the mechanical parts of flat semiconductors, flat or slight increase. That has been the breakdown. For this fiscal year, when the machine components -- mechanical components, the major customers cycle is what we have to take into account that we're being conservative. So the decline in profit and decline in sales. But for the optical devices, basically, this will be flat or maybe a slight growth. That will be the sales and operating profit, the same story. Increase of profit is what we are anticipating. For the semiconductors, it will be about 10% -- more than 10% sales growth and profit would be growing in the same level. So if you combine all of this, that is the number that we are showing you in the presentation.

So within this, so this is a very short-term question. But for the fourth quarter, the profit, I think there are some various special factors, but JPY 600 million. In the first half, it was JPY 1.1 billion in the first half of this is going to recover. Of course, the second quarter camera actuators is going to recover. I understand that. But the first quarter, it seems to be at a low level. Is that the way to understand this?

Yes. For the first quarter, if you look at that by segment profit plan, first quarter starting at JPY 1 billion, second quarter of JPY 10.5 billion. So for the first half, it's JPY 11.5 billion. The first quarter will be a very slow start. Because of the optical devices, new model is in between the models and the former older models of production is slowing down to semiconductors. The BB ratio is over 1. It's about 1.3% is recovering. But currently we have been increasing the production. So -- but in the second quarter, it's going to see a substantial recovery. For the game business, the first quarter, it's in the slow season. So everything -- what has been slow in the first quarter will start to recover in the second quarter. So within this mix, the Mitsumi of this fiscal year's outlook, the first half is JPY 11.5 billion. The second half is JPY 30.5 billion. That's our outlook.

So for the semiconductor business, you talked about the analog front-end related sales, so JPY 70 billion by 2030, you are going to expand the sales to that level. So 2030 analog semiconductor overall sales size, what will that be? And what would be the profit in 2030? And again, this is a very short-term question, but -- so with which -- when will be the bottom? And when will we start to see a sign of recovery?