HIROSE ELECTRIC CO., LTD.

Q3 Financial Results Briefing for the Fiscal Year Ending March 2019

February 7, 2019

Event Summary

[Company Name]

HIROSE ELECTRIC CO., LTD.

[Event Type]

Earnings Announcement

[Event Name]

Q3 Financial Results Briefing for the Fiscal Year Ending March 2019

[Fiscal Period]

FY2018 Q3

[Time]

[Date]

February 7, 2019 10:30 - 11:27

(Total: 57 minutes, Presentation: 29 minutes, Q&A: 28 minutes)

[Venue]

Sapia Tower 6F 602, 1712 Marunouchi, Chiyodaku, Tokyo 1000005

[Venue Size]

231 m2

[Number of Speakers]

2

Hiroshi Fukumoto

Hideo SuzakiOperating Officer, Acting Group President, Administration Group

Manager, IR Office, Administration Group

Presentation

Suzaki: Good morning. As the time has come, we will commence a briefing on the financial results for the third quarter of Hirose Electric from now on. Thank you very much for your visit today. I am Suzaki, Investor Relations Office, Administration Group of Hirose Electric. First of all, I would like to confirm the documents we have distributed to you. The materials for the financial results briefing are provided in the file at the reception desk. In addition, the financial results announced yesterday on the Tokyo Stock Exchange, the announcement of revisions to the financial results forecast. These three parts are the materials for today. Do you have them?

Now I'll start. First, we outline our financial results for the third quarter. Orders received were 97.44 billion yen, down 1.3% from the same period of the previous fiscal year. Sales were 95.99 billion yen, an increase of 0.9% year on year. Operating income was 19.99 billion yen, the profit margin was 20.8% and the yearonyear decrease thereof was 13.6%. Regarding the three major fields by application, sales for the general industrial machinery market remained generally at a high level from the previous fiscal year, despite some adjustments for FArelated sales. Nevertheless, the yearonyear rate of change only slightly increased by 4%, partly due to the effects of the economic downturn caused by the worsening of the U.S.China relations. I would like to touch on this of 4Q later.

In addition, thanks to the demand for new models for smartphones, known as the autumn model, sales remained steady in the third quarter, particularly until November. However, it was affected by inventory adjustments for some models in December, resulting in the slowdown. Accumulated total in the third quarter recorded a 9% yearonyear decrease. When I explained the 2Q, I stated that the sales would increase slightlyin the 3Q. However, as we saw a sharp decline in December, the quarteronquarter figure was also slightly negative.

Sales for automotive applications were steady. Cumulative 3Q sales increased by 11%. To a certain extent, sales for the Automotive sector have been in line with our plan. The increase in demand for EVs and ADAS are contributing to its steadiness.

Next, please see the graph. First, although sales were firm as a whole due to growth in sales for the Automotive, orders actually declined sharply. While the 3Q figure is accumulated amount for three months, the orders in December declined particularly. In terms of sales, the index has risen from 107 to 109, but it also saw a slight decline in December.

Next, we will see the Smartphone. Looking at the index, it appears that from 2Q to the 3Q is almost flat and slightly down, showing the figure of 109 to 108. Looking at the contents, however, the figure for the Chinese market is slightly positive, while for other areas, the figure is slightly down, resulting in a total slight decrease.

As I mentioned earlier, the smartphone also recorded significantly lower sales in December. The figures are not disclosed, but the monthonmonth figure from November to December showed a roughly 20% reduction.

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Disclaimer

HRS - Hirose Electric Co. Ltd. published this content on 18 February 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 18 February 2019 02:21:09 UTC