Table of contents MISUMI Group Inc. FY1 (ending March 19) First half year () earnings report 1. earnings overview. FY1 full year consolidated earnings forecasts 11 October 3, 1 Representative Director, President and CEO Ryusei Ono 1 earnings overview Record high sales for the 7th consecutive period, slightly falling short of the initial IT infrastructure investments essential for business model innovation deployed ahead of schedule earnings overview Percentage change Plan YoY Vs Net sales,5 17, 1, +9.3%.% Operating income (before amortization of goodwill, etc.)*,7,1 1, 19.3% 19.% Margin 13.% 11.% 9.7% 3.5pt.1pt Operating income 1,9 19,,9.9% 19.7% Margin 1.% 11.% 9.5%.9pt.1pt USD 111. yen 11.1 yen EUR 1. yen 19.9 yen RMB 1.5 yen 1.7 yen Ordinary income 1,7 19,7,97 1.3% 1.9% Net income 13, 1, 11,573 11.% 1.5% *Operating income before the amortization of goodwill and other intangible fixed assets associated with the acquisition of Dayton Lamina Corporation (DL) 3
Transition of sales Overall growth continued compared to the previous year, and growth rate declined from the extremely booming of last year 1 1 1 1 1 +19.3% +7.3% +.9% +7.% +5.% 1. billion yen +9.3% +.% +17.7% +5.% 1 3 5 7 9 1 11 1 13 1 1 17 FY1 sales by business segment FA: number of customers expanded globally given the superiority of reliable and quick delivery model Die components: sluggish market conditions in the U.S. and Japan was amply covered by market share expansion in Asia VONA: growth continued with increased product lineup and international expansion YoY change basis basis Total,5 1, +9.3% +.9% FA business 51,731 5, +.% +7.9% Die components business 3,9 3,9.5%.7% VONA business,1 7, +1.% +.% 5 domestic & overseas sales Japan: VONA business was the growth driver as well as FA business secured sales increase Overseas: growth in China slowed down, notwithstanding growth continued in Asia and Europe Overseas sales grew 1% in local basis, overseas ratio was.7% 1 1 1 1 Domestic & overseas sales Index: =1 (/H) Domestic sales 111 11 Japan 1 9 7 5 Overseas sales () 1. 1 5 sales by region (local basis) Asia: expansion of VONA business in Southeast Asia was the growth driver North America: slight increase in sales due to sluggish demand from the automotive sector Europe: number of customers continued to increase due to strengthening of the reliable and quick delivery model Asia (including China) Index: FY 1() = 1 113 1 Currency 11 5 North America 13 1 1 5 Europe 1 113 Overseas sales 9 1 11 1 13 1 1 17 FY1 3 1 9 1 11 1 13 1 1 17 FY1 9 1 11 1 13 1 1 17 FY1 China 1 () Asia 13 (1) Parentheses indicate local basis 9 1 11 1 13 1 1 17 FY1 9 1 11 1 13 1 1 17 FY1 FY17 USD 111. yen 11.1 yen EUR 1. yen 19.9 yen RMB 1.5 yen 1.7 yen 7
operating income by business segment FA: high profitability sustained amid accelerating investment for growth Die components: despite increase in expenses incurred to strengthen the business foundation, profits increased owing to decrease in amortization of goodwill VONA: prioritized acceleration of international expansion and continuation of strategic countermeasures against competitors YoY Margin Margin basis basis Total 1,9 1.%,9 9.5%.9% 17.5% FA business 1,539.% 9,791 17.5% 7.1%.% Die components business,77 7.% 3,31.% +1.% +.% Before amortization of goodwill, etc. 3,93 1.% 3,537 9.% 1.% 1.% VONA business 5,3 9.% 3,117.3%.5% 9.% Other factors and adjustments 7-3 - - - operating income analysis (yoy) Accelerated growth initiatives such as HR & organization reinforcement and IT infrastructure enhancement Business model revitalization fast forwarded ahead of manufacturing industry s intensifying digitization trend 1.9 1 1 1 1 1 3.9 HR & org. reinforcement 3.1 1. IT infra. enhancement Warehouse expansion.. and other 5.3.3.9 9 operating income analysis (compare to ) Aiming to accelerate international expansion of the VONA business, enhancement of EC websites was progressing globally ahead of Competitive pricing strategy in the market and marketing strategy enriched compared to 19. 1 1 1 1 1.5. IT infra. enhancement and other 1.5 1... HR & org. Warehouse reinforcement expansion.5.9 FY1 full year consolidated earnings forecasts 1 initial 1 FY17 FY1 H FY1 full-year USD 11.9 yen 1. yen 19.1 yen EUR 19. yen 19. yen 19.5 yen RMB 1.7 yen 1. yen 1. yen 11
FY1 full year earnings forecast (revised) Given the slowdown in manufacturing industry s business climate, the full year outlook has been revised Continuing initiatives towards sustainable growth as well as maintaining conducive conditions for profit increase FY17 Initial Revised forecast FY1 *1.Operating income before the amortization of goodwill and other intangible fixed assets associated with the acquisition of Dayton Lamina Corporation (DL).Amortization of goodwill completed in October 17 YoY Vs initial Net sales 31,99 31, 33, +9.% 5.% Operating income (before amortization of goodwill, etc.)* 3,5,3 35,.% 11.7% Margin 11.7% 11.% 1.% 1.3pt.pt Operating income 3, 39,7 35, +.% 11.% Margin 11.1% 11.% 1.%.9pt.pt Ordinary income 3,79 39,5 35, +1.5% 1.9% Net income 5,1,5 5,7 +.% 9.% 1 FY1 sales forecasts by business segment FA: China s business climate continues to decelerate while growth will be maintained due to expansion of customer numbers in Asia and Europe Die components: growth in Asia continues but sluggish demand in Japan and U.S. will make it marginal in rise VONA: sustained growth both in Japan and overseas as a result of increase in product lineup and reliable quick delivery FY17 Previous Revised forecast FY1 basis YoY basis Vs previous Total 31,99 31, 33, +9.% +1.5% 5.% FA business,1 11, 111, +5.7% +.% 5.9% Die components business 7,53, 77,9 +1.% +3.3% 3.1% VONA business 131, 1, 3,9 +17.% +17.9% 5.% Other factors and adjustments - - - - - - 13 FY1 domestic & overseas sales forecasts Japan: VONA business continues to grow while FA business expects to increase despite decrease in market demand Overseas: thanks to reliable and quick delivery prowess, continuous growth in Asia and Europe will be the driving force Overseas sales will increase by 1% in local basis, overseas ratio expected at 7.% 1 1 1 1 Domestic & overseas sales Index: FY17= 1 Domestic sales Overseas sales 9 1 11 1 13 1 1 17 FY1 1 11 1 11 Japan 19 1 1 1 Overseas sales 11.9 9 1 11 1 13 1 1 17 FY1 1 1 FY1 sales forecasts by region (local basis) Asia: demand is expected to slow down in China and South Korea, while high growth will continue in Southeast Asia North America: automotive related demand is expected to recover in the H, but increase will remain to be marginal for the full year Europe: penetration of reliable quick delivery and customer expansion is expected to continue 5 Asia (including China) Index: FY17= 1 9 1 11 1 13 1 1 17 FY1 China 1 (1) Asia 1 (1) Parentheses indicate local basis 11 117 1 1 1 1 11 1 5 North America 1 9 1 11 1 13 1 1 17 FY1 1 5 117 9 1 11 1 13 1 1 17 FY1 FY17 FY1 H Europe FY1 full year USD 11.9 yen 1. yen 19.1 yen EUR 19. yen 19. yen 19.5 yen RMB 1.7 yen 1. yen 1. yen
FY1 operating income forecasts by region Business foundation strengthening initiatives within the respective region will take precedence Improvements in manufacturing efficiency and reduction in procurement will continue to be reinforced 1 5 Margin % China & rest of Asia 1. 1. 1 5 Margin % Americas & Europe 1..3 FY1 operating income analysis (yoy) Continuing to deploy initiatives in order to establish a competitive advantage Securing same level of operating income as the previous year with sales volume increase and reviewing methods of advertising 3 3. 5. 11. 35. 3 1 HR & org. reinforcement 5. IT infra. enhancement 1. Warehouse expansion.1.9.3 and other -5-5 1-1 9 1 11 1 13 1 1 17 FY1 *1.Based on operating income by region.beginning with FY1, operating income (margin) is disclosed as two regions: Americas & Europe and China & rest of Asia 3.Calculation based on operating income before the amortization of goodwill and other intangible fixed assets associated with the acquisition of Dayton Lamina Corporation (DL) -1 9 1 11 1 13 1 1 17 FY1 1 FY17 FY1 Plan 17 FY1 H operating income analysis (compare to ) Initiatives for growth deployed in advance in, and cost reductions will be adjusted by operational fluctuations in H Securing profitability by reducing advertisement, restraining personnel hires, and cost reduction 19.9 5.7.5. 1 1 1 1 1 FY1 H initial.. 1.9.5 Warehouse HR & org. expansion reinforcement IT infra. and other enhancement 19.1 FY1 H revised 1 1. 1. Investment Capital investments made in progressed almost according to Production and logistics related investments for H were slightly revised reflecting market operational trend 1 9 3. Production and logistics related IT related. Capital expenditures by half year 3. 3.. 3. 1.3 1..3 1. H H H H FY FY1 FY17 FY1 5.1 1.9 3. 1.3..1 1.7 5.7 5. 13.3.7. 19
1, 1, 1,,,7 Reinforcement of personnel With the aim to expand business and strengthen the business foundation, reinforcement of the organization continues globally In conjunction, by improving the business process, reassessing the number of new hires No. of people Changes in the number of employees 9, 1,17 11,1 1, +9 1, +1,9 Shareholder return dividend was 1.1 yen, a decrease of 1.31 yen year-on-year The annual dividend is expected to be.7 yen, an increase of.7 yen year-on-year /share 3. 5... 1. 5. 3.33.73 7.73 Dividends per share 9. 1.7 13.5. 1.71 yen (+1.9 yen yoy).7 yen (+.7 yen yoy) Year-end 1.71 Year-end 1. yen (+1.3 yen yoy) 11. yen (+1.9 yen yoy) 11.5 yen (+3.91 yen yoy) 1.1 yen ( 1.31 yen yoy), 1 1 17 FY1 FY1. 9 1 11 1 13 1 1 17 FY1 * Effective July 1,, we executed a 3-for-1 stock split. Past DPS amounts have been adjusted to reflect the split 1 Consolidated net sales Summary Demonstrating MISUMI s resilience against recession and ning to attain sustainable growth by further expanding customer base 35 3 YoY 9.% 33.bn 5 CAGR 1% 1 Start of former CEO Mr. Saegusa s leadership CAGR 1% 5 3 1 7 79 1 3 5 7 9 91 9 93 9 95 9 97 9 99 1 3 5 7 9 1 11 1 13 1 1 17 1