Minebea Co., Ltd. 56th Business Term Business Report April 1, 2001 M March 31, 2002 To Our Shareholders As the 56th Business Term (April 1, 2001 - Under these tough management environments, Minebea March 31, 2002) has ended, I would like to Group continued trying to attain gains in efficiencies of sales- report our business summary. marketing and manufacturing activities while enhancing prod- uct quality and developing value-added products. During our consolidated fiscal year 2002 ended March 2002, the Japanese economy stayed under severe circumstances Consolidated Business Results as a whole. Hit by slowdowns in the U.S. economy and Our full-year consolidated net sales amounted to 279,344 mil- slumps in information technology-related industries, exports lion yen but fell 7,701 million yen (-2.7%), from a year earlier. fell. Affected by inventory adjustments, factory output and Our operating income and ordinary income fell 11,005 million capital investment diminished. Consumer spending alike yen (-33.4%) and 8,731 million yen (-35.3%), respectively stayed in a low key. from a year earlier, to 21,972 million yen and 15,995 million Slowdown in the U.S. economy was spurred further with the yen, respectively. Our net income also decreased by 9,527 terrorist attacks, however, toward the end of our fiscal year million yen (-64.3%) to 5,298 million yen, largely due to an 2002, a recovery began to appear on the horizon. adjustment of income taxes of 2,711 million yen treated in On the other, Asian and European economies also pro- accordance with our tax effect accounting, among others. gressed in a hard situation by and large with factory output and exports decreasing as affected by an economic reces- Non-Consolidated Business Results sion in the U.S. and sluggish demand from IT-related indus- Net sales fell by 22,457 million yen (-11.4%) from the previous tries. year to 175,218 million yen. Operating income also declined Information- and telecommunication equipment-related 10,398 million yen (-84.9%) from the previous term to 1,848 industries constitute a major market for our products. million yen. Ordinary income, in the meantime, decreased Demand from this market was sluggish, as the world mere 2,093 million yen (-17.3%) from the preceding year, to economies were taking shape of a slump almost concurretly 10,033 million yen owing mainly to the increased dividends as remarked above. And such tough surroundings lasted from our overseas subsidiaries. throughout the year. Extraordinary loss decreased compared with the previous year. In addition, we included 3,104 million yen in income tax I Net Sales I Operating Income I Ordinary Income (Unit: millions of yen)Non-Consolidated Consolidated (Unit: millions of yen)Non-Consolidated Consolidated (Unit: millions of yen) Non-Consolidated Consolidated 300,000 35,000 25,000 30,000 250,000 20,000 25,000 200,000 15,000 20,000 150,000 15,000 10,000 100,000 10,000 5,000 50,000 5,000 0 0 0 FY2000 FY2001 FY2002 FY2000 FY2001 FY2002 FY2000 FY2001 FY2002 1 and other adjustments in accordance with the tax effect accounting. As a result, net income increased 404 million yen (10.2%) over the previous year to 4,351 million yen. Outlook for The Next Term As for our fiscal year ending March 2003, inventory adjust- ments in Japan are expected to finish throughout the IT-relat- ed industries, and an upturn is expected in the business surroundings for exports. However, employment and personal income, as part of economic indicators, are expected to worsen while consumer spending staying at a relatively low level. With these parameters combined, the Japanese econo- my is expected to remain sluggish for some time of the year. Outside Japan, on the other hand, notably in Southeast Asia and the U.S., there is a visible sign of slow recovery in their economics. We intend to further enchance and expand its manufac- turing and sales, and improve its business results. I look forward to your continuous support and guidance. Tsugio Yamamoto June 2002 President and Representative Director I Net Income I Total Assets I Shareholders’ Equity (Unit: millions of yen) (Unit: millions of yen) (Unit: millions of yen) Non-Consolidated Consolidated Non-Consolidated Consolidated Non-Consolidated Consolidated 15,000 500,000 20,000 10,000 400,000 15,000 5,000 300,000 10,000 FY2000 200,000 0 FY2001 FY2002 5,000 100,000 -5,000 0 0 -20,000 FY2000 FY2001 FY2002 FY2000 FY2001 FY2002 2 The Performance by Industry Segment Machined Components Business circumstances, sales of fan motors, stepping motors, FDDs This segment in our businesses is represented by ball bear- and other products stagnated. However, sales of spindle ings, which are our mainstay product; rod ends & spherical motors for HDDs performed well, and sales of keyboards bearings that are used mainly in aircraft; mechanical parts were firm. As a result, compared with the previous fiscal year, including pivot assemblies used in hard disk drives (HDDs) for sales increased by 4,393 million yen (2.9%) to 156,303 million personal computers; fasteners for aircraft and vehicles; and yen, and operating losses reduced by 8,421 million yen to other items for defense-related industries. 162 million yen. Although ball bearings were firm in sales to several manu- facturers of household electrical appliances and the automo- Consumer Business and Others bile industry, they were slow as a whole due to sluggish Our consumer business largely comprises purchases of furni- demand from the information and telecommunications equip- ture in Europe and their exports to Japan. On February 23, ment industry. As a whole, our ball bearings were selling rela- 2001, during the previous fiscal year, we sold furniture import tively slowly. subsidiary and retired from its business, however, we had Also, sales of rod-end bearings were in a severe situation continued the furniture procurement operation alone in due to decreased demand from the aircraft industry—our Europe until the end of February 2002. As a result, compared core market segment—after the September terrorist attacks with the previous fiscal year, sales and operating losses in the United States. However, with sales growing satisfactori- decreased by 9,658 million yen (-90.5%) and 812 million yen, ly in the first half of the term, they were firm as a whole due to respectively, to 1,016 million yen and 0.4 million yen. sales of unfilled orders in the second half of the term. As a result, our sales and operating income from this product category remained at 122,025 million yen and 22,135 I Changed in Net Sales and Operating Income million yen, respectively, dropping by 2,436 million yen (- (Industry) 2.0%) and 1,771 million yen (-7.4%) from a year earlier, Machined Components Business respectively. Electronic Devices and Operating Net Sales Components Business Income Consumer Business (Unit: millions of yen) and Others (Unit: millions of yen) Electronic Devices and Components Business 350,000 35,000 This product group mainly consists of spindle motors, cooling 300,000 30,000 fans, stepping motors, and other small-sized precision motors, as well as computer keyboards, audio speakers, flop- 250,000 25,000 py disk drives (FDDs), switching power supplies, and measur- ing instruments. 200,000 20,000 Due to slow demand from the information and telecom- 150,000 15,000 munications equipment industry—our main customer seg- ment, price competition intensified. Under these business 100,000 10,000 50,000 5,000 0 0 Net Sales Operating Net Sales Operating Net Sales Operating Income Income Income FY 2000 FY 2001 FY 2002 3 The Performance by Geographical Segment Japan for aircraft increased because of sales of unfilled orders. As a To cope with strong deflationary pressure, many of our cus- result, compared with the previous fiscal year, sales and oper- tomers took such decisive measures as shifting production ating income rose by 5,377 million yen (9.2%) and 641 million items to their overseas factories. As a result of this shift, yen (48.3%), respectively, to 63,569 million yen and 1,968 together with sluggish demand from the information and million yen. telecommunications equipment industry, sales decreased by 27,939 million yen (-25.0%) from the previous fiscal year, to Europe 83,704 million yen. Also, operating income reduced by Europe kept deepening a receding trend in economy, when 11,039 million yen (-93.5%), to 767 million yen. our ball bearings and rod end & spherical bearings, among others, were advancing steadily in sales. As a result, our com- Asia bined sales attained a gain of (4.1%) 1,413 million yen to Asia other than Japan has become an important region as the 36,186 million yen, though our operating income slipped by (- manufacturing base of personal computers and household 25.5%) 632 million yen to 1,850 million yen, respectively from electric appliances for American, European, and Japanese a year earlier. makers. The information- and telecommunications equipment- related products made in this region were sluggish in demand from EU, Japan, and the U.S. Despite this impact, however, our sales kept gaining steadily thanks to the geographic effects generated by many Japanese makers shifting produc- tions to this region. I Changed in Net Sales and Operating Income As a result, compared with the previous fiscal year, sales (Geographical) Japan and operating income increased by 13,446 million yen Asia Operating (16.3%) and 24 million yen (0.1%), respectively, to 95,883 Net Sales North and South America Income million yen and 17,386 million yen.