Introduction/ Chapter I Chapter II Chapter III Chapter IV Chapter I Value Creation Story of MinebeaMitsumi President’s Message Value Creation Story of MinebeaMitsumi Financial Strategy and Capital Policy Initiatives for Value Creation Initiatives to Support Value Creation
1. History of MinebeaMitsumi 2020 New building is completed at the Akita 2010 Business Division Suzhou Plant is established to Organic growth 1988 expand Automotive devices business Lop Buri Plant is established in Thailand production of LED backlights development is reinforced Production in the electronic (Ultra-precision machining technology) devices and components area × is expanded Backlights Growth through M&A Suzhou Plant (China) Akita Business Division of MITSUMI ELECTRIC CO., LTD. The corporate profile can be viewed from here. 2010 Lop Buri Plant (Thailand) Our plant is established in Cambodia, and commences production the next year 1984 1994 Bang Pa-in Plant is established as For risk diversification, Founded Minebea Electronics & expansion of production and the second facility in Thailand Hi-Tech Components reduction of costs Resonant devices in July 1972 50 1951 (Shanghai) Ltd. (our ▼ Our first own overseas plant 1986 first plant in China) is Nippon Miniature Bearing Co., in Singapore is constructed Hamamatsu Plant is established which produces Ltd., Japan’s first specialized established, 2018 bearings and fan motors from parts manufacturer of miniature ball 1980 Development in the Kosice Plant in Slovakia commences production in a vertically-integrated manner bearings, is incorporated in Ayutthaya Plant is established electronic devices and Supply to Europe market is expanded As of August 2020 Azusawa, Itabashi-ku, The Company advances components area is 40 Tokyo. for the first time into expanded ▼ Total of 50 M&As! Thailand, the Group’s AGA (Active Grill largest facility Shutter) Actuators We aim to keep Chai Chee Plant (Singapore) achieving growth by actively pursuing M&A
Shanghai Plant (China) opportunities ▶ Organic growth FDDs and MODs 30 ▼ 2019 1963 German precision molded parts Plant is relocated from Kawaguchi, Saitama, and operations 2017 manufacturer is acquired begin at the Karuizawa Plant, to become the Ayutthaya Plant (Thailand) 25 ▼ The Company conducts a business integration with Capacity for swift production in mother plant of all the MinebeaMitsumi Group’s MITSUMI ELECTRIC CO., LTD. through share exchange Europe and Asia is expanded plants worldwide, in Miyota-machi, Nagano 2009 Accelerated growth of each business as an “Electro 20 TM ▼ Production of micro actuator is Mechanics Solutions ” Provider that commenced integrates control technology with machine Number of production and electronic technology Miniature ball bearings 1988 facilities of motors is The U.K. rod-end bearing manufacturer increased
is acquired Micro actuators Mast Kunststoffe GmbH & Co.KG Supply to Europe market is Karuizawa Plant (Japan) 1-cell Lithium-ion Battery Protection IC expanded 2020 1980 Head office of MITSUMI The Company conducts a business 2010 The Company commences ELECTRIC CO., LTD. integration with ABLIC Inc. through 5 Production of brushless ▼ the production of acquisition of its shares motors is commenced small-sized ball bearings 2019 The Company’s presence in Product lineup of ▶ M&As DC motors The Company conducts a business integration with U-Shin the analog semiconductor motors is expanded Ltd. through tender offer 1974 market is strengthened 1985 Generated synergy in the automotive, housing The Company embarks on Business Strategy Pages 35 to 36 The U.S. ball bearing manufacturer is acquired equipment and industrial equipment areas the electronic devices and Small-sized ball bearings Supply to the U.S. market is expanded through the strength of new INTEGRATION components area (measuring 2015 components: the present Major manufacturer of measuring components Sensing Device BU) 1971 in Germany is acquired Production Production and supply in Door handles overseas is Europe and India Aircraft components are expanded commenced for the Takatsuka Unit of ABLIC Inc. in the U.S. Sensing first time devices Hiroshima Plant of U-Shin Ltd. Climate control panel Strain gauges Number of M&As 3-
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1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
9 MinebeaMitsumi Group Integrated Report 2020 MinebeaMitsumi Group Integrated Report 2020 10 Introduction/ Chapter I Chapter II Chapter III Chapter IV Chapter I Value Creation Story of MinebeaMitsumi President’s Message Value Creation Story of MinebeaMitsumi Financial Strategy and Capital Policy Initiatives for Value Creation Initiatives to Support Value Creation
2. MinebeaMitsumi Current Creating high-quality products in the global market We created a global system for production and sales, responded to local production and local consumption, and reduced exchange, Toward becoming a one-of-a-kind disaster and geopolitical risks. Others 12 % INTEGRATION manufacturer of precision Thailand 6% Japan 34% components by maintaining a diverse portfolio The United States 10 % Sales territory mix Net sales by region MinebeaMitsumi pursues synergies through INTEGRATION while maintaining an outstanding (Fiscal year ended March 2020) risk diversification structure drawing on both an effective product mix encompassing everything 27countries from automobiles and aircraft to smartphones, medical devices and infrastructure; and also on a Europe 15% complementary framework brought about by expanding global production sites extending throughout China 23% Japan, Americas, Europe and Asia. production and We will continue to achieve further growth, while consistently securing profits even as we encounter 93development sites adverse circumstances.
Net sales by business The Company set a new record high in net sales for the fiscal year ended March 2020 Machined Components sales offices due to its mix of products and manufacturing sites. Business 91 (As of August 1, 2020) Percentage of overseas production % U-Shin Business Net sales ¥180.9 billion 88 (Fiscal year ended March 2020) Net sales ¥125.1 billion Net sales composition 18% [Major products] Net sales composition 13 % Net sales composition ■ Ball bearings 12% [Major products] ■ Rod-end and fasteners 4% Automotive components, ■ Pivot assemblies 3% components for industrial equipment, components for home Net sales security units (house and general building’s locks and others) Electronic Devices and The World’s No. 1 share Components Business ¥ 978.4 billion Miniature & small-sized Pivot assemblies for 1-cell Lithium-ion Net sales ¥ billion ball bearings hard disk drive (HDD) Battery Protection IC MITSUMI Business Operating income 379.4 Net sales composition % Net sales ¥292.2 billion ¥58.6 billion 39 (Fiscal year ended [Major products] Net sales composition 30% March 2020) Net sales composition ■ [Major products] Motors 18% 60% 5060% 8050% 8065% 65% ■ 60 50 80 65 Camera actuators, high-frequency Electronic devices 17% ■ components, semiconductors, Sensing devices 3% mechanical components, 60% 50% 80% 65% connectors, switches, etc. *Net sales of 0.8 billion yen for Other business is omitted here. The World’s Percentage of The World’s smallest thinnest Mix of products and manufacturing sites net sales* of The Company achieves sustainability by drawing from complementary Green Products Miniature The world’s smallest class The world’s smallest class Light guide plates for relationships among elements of its portfolio. ball bearings stepping motors tactile switches LED backlights for LCDs Singapore Others 2 External DiameterExternal DiameterArea ThicknessArea Thickness Cambodia 2 Thailand % diameter Diameterdiameter Area Thickness 85.8 diameter North America 2 Others O ice Europe (Fiscal year ended automation March 2020) mm External mmmm mmmm2 0.3mmmm2 0.3mm communications 1.5 3.1.53 Diameter 43..03 Area 4or. smaller0 Thickness or smaller 2 Manufacturing diameter or smaller otors 2 Product mix Philippines site mix ome electronics (Fiscal year ended 2 (Fiscal year ended * Excluding 2 mm products that cannot be 0.3 March 2020) March 2020) 1.5mm 3.3mm 4.0mm Aircra t aerospace designed in-house. or smaller Japan 2 Personal computers Automobiles 2 Green Products Page 47 communication devices China 2
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3. Value Creation Model of MinebeaMitsumi
MinebeaMitsumi’s three strengths are “Reinforcing Core Businesses,” “Diversified Niches,” and Sustainable growth based on three strengths “Generating Synergies through the INTEGRATION*.”
By refining these three strengths and generating synergies, we have created environmental and social and non-financial capital value at the same time as economic value, thereby accumulating both financial and non-financial capital.
Using all such capital, we will further hone our three strengths to realize sustainable growth. * INTEGRATION means “combining” rather than “simple gathering” of the Company’s proprietary technologies to evolve the “Eight Spears” and to create new products in various fields through the INTEGRATION of our advanced technology.
Strength I Strength II Strength III Generating Reinforcing Core Sustainable growth of Diversified Niches Synergies through Businesses the INTEGRATION MinebeaMitsumi Group
Research and Quality Procurement Manufacturing Logistics Sales development assurance Economic value created ● Environmentally friendly products made possible by MinebeaMitsumi’s high-quality components ● Efficient use of social infrastructure as a result of relatively low prices and high product reliability ● Numerous No.1 products ● High operating margin Non-financial capital to build up strength ● Ability to generate cash backed by high earning power ● Return on equity (ROE) Instrumental capital Human capital Intellectual capital ● Return on invested capital (ROIC) ● Vertically-integrated ● Global human resources ● Ultra-precision machining manufacturing ● Women’s empowerment technology Environmental and social value created ● Global operation ● Skilled workers/engineers ● Comprehensive manufacturing, ● Accumulated manufacturing engineering, development, and ● Mass production with minimum environmental knowhow sales capability footprint ● M&A capability/PMI ● Creating environmentally friendly products
Instrumental capital Pages 37 to 38 Human capital Pages 39 to 42 Intellectual capital Pages 43 to 44 ● Using IoT to help build smart industry ● Encouraging agricultural workers in emerging countries to participate in the latest technology fields Fundamental philosophy ● Empowering women worldwide
● Corporate Philosophy To contribute to society by “Producing better products, with faster speed, in larger numbers, at lower cost and by smarter means.” We create environmental value, for example through the supply of environmentally considerate products such as ball ● Basic management policy bearings that reduce friction and increase energy efficiency. We also create social value through means such as raising Transparent management based on our company credo “The Five Principles” awareness of agricultural workers in emerging countries and encouraging their participation in the latest technology fields. In this way, we achieve business activities that harmonize the resolution of social issues with the creation of economic value. ● Corporate strategy Through these activities, we aim to realize the SDGs promoted by the United Nations. Create new value through “difference” that transcends conventional wisdom
13 MinebeaMitsumi Group Integrated Report 2020 MinebeaMitsumi Group Integrated Report 2020 14 Introduction/ Chapter I Chapter II Chapter III Chapter IV Chapter I Value Creation Story of MinebeaMitsumi President’s Message Value Creation Story of MinebeaMitsumi Financial Strategy and Capital Policy Initiatives for Value Creation Initiatives to Support Value Creation en ore te hnologies
Ultra- Sensor Mass High- Electronic Semiconductor Mechanism System 4. MinebeaMitsumi’s Strengths precision technology Optical MEMS production frequency circuits design design design machining (load, technology technology technology technology technology technology technology technology Centered on our ten core technologies, technology pressure, etc.)
we will continue to pursue organic growth Core businesses (Eight Spears) Sub-core businesses efinition of ore business efinition of sub ore business through the generation of synergies through ⑴ Serve niche fields in massive markets ⑴ Serve niche fields in massive markets (same as the core business) ⑵ Capable of drawing on our ultra-high quality and ultra-precision ⑵ Capable of drawing on our ultra-high quality and ultra-precision machining technologies machining technologies (same as the core business) INTEGRATION and our core/sub-core strategy. ⑶ ot rea il ispla e e en as a result of te hnologi al inno ation ⑶ otentiall ispla e ue to te hnologi al inno ation he foun ation of growth for analog semi on u tors is omplete due In the sub-core businesses, we are minimizing risk through initiatives to integration with ABLIC. that include keeping fixed costs to a minimum and taking accelerated Ranking rose from 8th to 4th in the Eight Spears. depreciation method on investment, given potential for future We will combine and utilize ten core technologies refined by MinebeaMitsumi, displacement of such business. such as ultra-precision machining technology and mass production technology, to evolve each of the Eight Spear products and create new business opportunities through the INTEGRATION and recombination of the evolved products. Furthermore, in addition to the Eight Spears core businesses, we are also developing “sub-core businesses” using our core technologies. ⑴ earings ⑵ Motors ⑶ ess ⑷ Analog We will maximize earnings from our sub-core businesses functioning as cash cows, pro u ts semiconductors
as well as further enhance technologies. Minebea Minebea M S M Shin M S M We plan to invest the created earnings to further enhance and grow our core businesses. Me hani al omponents ⑹ onne tors nergies it ore businesses su as M S M swit hes po er supp omponents M S M ⑻ Wireless/ ⑸ Sensors a lights for s communications/ ⑺ ower suppl software pansion o app i ations Minebea omponents to automoti e et Minebea M S M M S M M S M Three strengths which create difference expanding the realm of possibility amera a tuators ermanen e and substantia M S M gro t potentia ■ Products of core businesses ■ Products of sub-core businesses Strength I Vertically- Gateway ■ Origin of the business We aim to capture an overwhelming Ultra-precision majority of the market share with integrated Global e diagram abo e on eptua portra s t e ompan s business operations as an oor p an Reinforcing Core machining spe ia t store retai er o pri ate abe appare or emp o s a business mode t at entai s se ing re ated items o appare using a erti a integrated approa e tending rom p anning to our core products using our original manufacturing operation manu a turing and sa es Businesses technology and production system technology system
Ultra-high quality, highly competitive pricing capability, and swift and unrivalled supply capability Generating s nergies through the G
Strength II Diversified management ample of generating s nergies through the G centered on niche fields, Business Concentration Diversified Niche fields underpinned by strong diversification and selection Small-sized precision Bearing-sensor High sensitivity strain gauge Automobile electronics and Niches technologies motors using ultra-high- combination that can detect film MINEGETM and mobile devices using efficiency ball bearings, replacement periods ADC (analog-to-digital converter) connectors/switches and High market share and profitability controlling ICs, and sensors for precision robotics power supply components in niche fields
reating alue in arious businesses Strength III Core Further strengthening business through synergies derived from Generating technologies New Eight the INTEGRATION of Minebea business × MITSUMI business Synergies through × U-Shin business refined by Spears the INTEGRATION MinebeaMitsumi
Evolution through the INTEGRATION and recombination Automobiles Aircraft Robotics Medicine and Industry Information and Infrastructure Housing Advanced product groups that will be vital to society nursing care communications equipment
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5. Toward Sustainable Growth Underpinned by the instrumental, human, and intellectual capital it has amassed, the Company has been taking steps to establish robust management foundations that are not susceptible to risk, by accordingly strengthening its core businesses, diversifying operations, and promoting global production.
We will persist with business operations The Company has also been creating new value through INTEGRATION of such elements. under any and all circumstances firmly Meanwhile, going forward, we will seek solutions to social issues centered on material issues from the perspective of environmental, social, and governance aspects of business on the basis of our corporate philosophy. We will furthermore aim to achieve sustainable growth by providing beneficial value to our underpinned by our management foundation customers around the world, having set long-term quantitative targets seeking net sales of 2.5 trillion and risk management. yen and operating income of 250 billion yen. Vision for MinebeaMitsumi through the fiscal year ending March 2029
Quantitative targets Net sales Value Creation Model ¥2.5 trillion and/or Material issues (Materiality) Operating income Mega trends Creating environments where all employees can Strength I Strength II Strength III ¥250 billion demonstrate their maximum capabilities Environmental and Generating social issues Reinforcing Core Diversified Synergies through (Business opportunities) Ensuring employee safety and health S Businesses Niches EPS growth rate 1 the INTEGRATION ROE Creating positive and rewarding work +15％ or more E: Environment S or more 2 environments CAGR for next 15％ ● Global warming Human resources development 10 years ● Biodiversity S 3 worldwide ● Energy crisis Research and Quality Procurement Manufacturing Logistics Sales ● Resource depletion 4 Diversity promotion worldwide S development assurance Non-financial targets ● Natural disasters Creating new value that contributes to the Percentage of net sales Workplace Injuries development of society of Green Products S: Social Creating environmentally friendly E incidents ● Enhancement of 5 products 90% 0 information security Non-financial capital to build up strength Contributing to dialogue with and the S ● Development of AI and 6 development of local communities IoT society Instrumental capital Human capital Intellectual capital Business portfolio ● Growth of the global Creating solutions to social issues S ● Vertically-integrated ● Global human resources ● Ultra-precision machining population 7 manufacturing ● Women’s empowerment technology We will shift to core businesses, and ● ● ● Food crisis Ensuring stable supplies of the precision Global operation ● Skilled workers/engineers Comprehensive manage both the decreasing of volatility products that support society ● Accumulated manufacturing, ● Declining birthrate and of performance and improvement of risk manufacturing knowhow engineering, development, aging population in Providing safe and reliable products S and sales capability management. developed countries 8 ● M&A capability/PMI ■ Net sales of core businesses ● Widening disparity Practicing responsible procurement S Instrumental capital Pages 37 to 38 Human capital Pages 39 to 42 Intellectual capital Pages 43 to 44 ■ Net sales of sub-core businesses Fiscal year ending ● Pandemic (spread of 9 March 2029 infections) Basic strategies for next 10 years 10 Reinforcing risk management G Becoming the world’s mightiest INTEGRATION manufacturer of ¥2.5 trillion Material issues Page 46 precision components with our new Eight Spears Fiscal year ended March 2020 1. Change to new Eight Spears 3. Cultivate new markets ¥978.4 billion Management foundation and risk management 2. Launch new products 4. Pursue active M&As Instilling the corporate philosophy + Digitalization Group governance Human resources development + shareholder return maintaining financial discipline (including training successors) Succession planning, etc. Business and other risks Pages 61 to 62
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