Thank you very much for participating in the business results of MinebeaMitsumi full-year fiscal year ending March 31st, 2022. First, I would like to introduce today's participants. Representative Director, CEO and COO, Yoshihisa Kainuma. Director, Senior Managing Officer, Katsuhiko Yoshida. Chief Green Officer, Masahito Fukami.
Thank you very much. First of all, Yoshida will explain about the financial results, followed by Kainuma, who will explain about the management policy and the business strategy. In terms of the environmental related topics, Fukami will explain. After that, we will go into the Q&A session. We're planning to end today's meeting by 6 P.M. In terms of the details of the financial statements, on the website, we have the financial data, brief report of the financial results. Please refer to these as well. On the screen that you are watching, we have a link to a questionnaire.
This will be a very precious feedback to our IR activity. We will appreciate your feedback. In today's presentation, including the Q&A session, we will be recording it, because we want to upload it to our website. Please, be aware of that. Mr. Yoshida, please.
This is Yoshida. Today, I would like first to explain about the consolidated financial results for the fiscal year ending March thirty-first, 2022. Next slide, please. Consolidated net sales for the fiscal year March 2022 was JPY 1,124.14 billion, while operating income was JPY 92.136 billion. Profit for the period attributable to the owners of the parent was JPY 68.935 billion.
These figures represent year-on-year increases of 13.7%, 80.1%, and 77.9%, respectively, for net sales, operating income, et cetera, and all hit record highs. Operating income includes special expenses of approximately JPY 3.2 billion incurred due to the impact of COVID-19. Foreign currency exchange rates are estimated to have a year-on-year impact of +JPY 50.9 billion in net sales and +JPY 12 billion in operating income. Next slide, please. Consolidated net sales for the fourth quarter of the fiscal year March 2022 was up 15.4% year-on-year and down 4.9% quarter-on-quarter to total JPY 289.532 billion, hitting a record high for the fourth quarter.
Operating income increased by 2 x year-on-year and down 16.1% quarter-on-quarter to JPY 21.671 billion. Profit for the period attributable to owners of the parent increased by 2.2 x year-on-year and down 15.8% quarter-on-quarter to JPY 15.488 billion. Operating income for this quarter includes, in terms of the net sales and operating income, it was a record high level. Net operating income for this quarter includes special expenses of approximately JPY 0.9 billion incurred due to the impact of COVID-19. We estimate that the foreign currency translations have year-on-year impact of plus JPY 17.3 billion in net sales and plus JPY 4.8 billion in operating income.
Quarter-on-quarter impact was +JPY 3.9 billion in net sales and +JPY 0.4 billion in operating income. We made a slight retrospective changes to last fiscal year's financial statements due to the PPA for ABLIC. Please note that the figures on the following pages are revised figures. Next slide, please. 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 all the operating margin. The operating margin for the fiscal year ending in March 2022 was 8.2%, up 3.0 percentage points year-on-year. Next slide, please. This is the quarterly trend for the net sales, operating income, and operating margin. The operating margin for the fourth quarter was 7.5%.
This was up 3.2 percentage points year-on-year and down 1 percentage points quarter-on-quarter. Next slide, please. This 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. Although sales in the machine components segment were impacted by semiconductor shortages and strong sales of mainly ball bearings for fan motors meant that overall sales were largely in line with our forecast. In the electronic devices and components segment, although sales of sensing devices fell below our forecast, sales were higher than projected, thanks to strong overall performance in motors. The Mitsumi business enjoyed higher than projected sales overall, predominantly thanks to mechanical components, optical devices, and semiconductors. Sales in the U-Shin business were overall higher than projected, mainly due to strong performance in Europe.
Operating income in the machine component segment was slightly lower than our forecast, due to a less favorable product mix. Operating income in the electronic devices and components segment fell below our forecast, mainly due to lower capacity utilization rate caused by the lockdowns of some plants in China and the impact of shortage of semiconductors. In the Mitsumi business, operating income exceeded projections thanks to strong sales of optical devices and semiconductors, and improved profitability. Operating income in the U-Shin business was marginally higher than forecast. Next slide, please. Now let's take a look at the results by segment, starting with machine component 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 the line chart with the operating margins.
In the fiscal year March 2022, net sales were up 12.7% year-on-year, at JPY 177.5 billion. Sales of ball bearings increased 17.3% year-on-year to reach JPY 128 billion. The monthly average of bearing sales volume totaled 238 million units, an increase of 14.2% year-on-year. Looking at the sales by application, there was an overall increase, particularly in data centers and automobile applications. Sales of rod ends and fasteners were down 3.1% year-on-year at JPY 27 billion. Sales of pivot assemblies increased 9.8% year-on-year to total JPY 22.5 billion. Our share was held at 8% and steadily contributing to our bottom line.
Operating income for the fiscal year March 2022 was JPY 45.7 billion, putting the operating margin at 25.8%. We saw operating income increase 46.4% and operating margin rise six percentage points year-on-year. Looking at the year-on-year result by product, we see that profits for ball bearings, rod ends, fasteners, and pivot assemblies all rose. For the fiscal year ending March 2023, we expect an increase in sales for ball bearings due to continued increases in demand in a wide range of applications, mainly for automobiles and servers, as well as our strength in the production capacity. In our aircraft-related business, including rod ends and fasteners, we expect recovery in the second half of this fiscal year. For pivot assembly, we anticipate a decline in the demand as the HDD market shrinks. Next slide, please.
This slide shows the quarterly trend in the machine component segment. Fourth quarter net sales increased 6.8% quarter-on-quarter, at JPY 46 billion. Sales of ball bearings increased 6.7% quarter-on-quarter to JPY 33 billion. The monthly external shipment volume was down 0.4% quarter-on-quarter for an average of 231 million units. Although sales to data centers remained robust, they were affected by the shortage of semiconductors, particularly in the automobile sector and the lockdown in China. Sales of aircraft bearings remained sluggish due to the stagnant market. Sales of rod ends and fasteners totaling JPY 7.6 billion were up 19.2% over the previous quarter. Sales of pivot assemblies decreased 6.5% quarter-on-quarter to total JPY 5.4 billion.
Operating income for the quarter was JPY 11.3 billion, and operating margin was 24.5%. On a quarter-on-quarter basis, operating income decreased 2.9%, while the operating margin dropped 2.5 percentage points. Looking at the results by product, we see that profits for pivot assemblies fell along with the sales decrease, while rod ends and fasteners rose. Operating income for ball bearings remained almost unchanged. Next slide, please. Now let's look at electronic devices and components segment. In the fiscal year March 2022, net sales were up 2% year-on-year to total JPY 371 billion. Looking at the results by product, the sales of motor increased 32.3% year-on-year to reach JPY 267.2 billion.
This increase was due to the sales of spindle motors for HDDs, as well as the expansion of applications for motors in automobile and the launch of new products. Electronic device sales were down 48.5% year-on-year to JPY 64.2 billion. This is due to the declining number of sales units of models that use LED backlights at major customers, in addition to the impact from changes to the business segments as well. Net sales of sensing devices was JPY 35.4 billion, increasing 8.85% year-on-year. Operating income was JPY 21.6 billion with operating margin of 5.8%. Compared to the previous fiscal year, operating income increased by 22.3% and operating margin rose by one percentage point.
Looking at the results by product, we see that operating income was up for motors and sensing devices, but down for electronic devices. For fiscal year March 2023, we anticipate accelerated growth for motors due to the recovery in the automobile market, an increasing number of applications, and the launch of new products, and we expect a significant increase in both sales and profit. For electronic devices, we expect a decrease in sales and profits due to the decrease in the number of unit and models that use LED backlights. Sales of sensing devices will also be almost flat, but profits are expected to increase due to improved profitability. For your reference, figures shown for the fiscal year ending March 2021 and before are based on the classifications used before changes to the business segments were made.
Please note that the same applies to the rest of the presentation as well. Next slide, please.
This slide describes the quarterly trends in the electronic devices and components segment. Net sales increased 6.1% Q-on-Q to reach JPY 96.2 billion. Looking at the results by product, we saw that sales of motors increased 5.9% quarter-on-quarter to reach JPY 70.4 billion. This was because sales of motors in the automotive application remained steady. Sales of electronic devices were up 8.1% from the previous quarter to total JPY 15.4 billion. This was due to the launch of models that use our LED backlights by our key customers. Sales of sensing devices totaled JPY 9.1 billion, up 1.6% from the previous quarter. Operating income came to JPY 3.9 billion, and the operating margin was 4.1%.
On a quarter-on-quarter basis, operating income increased by 5.2%, while the operating margin remained unchanged. Please turn to the next slide. Now we are looking at the performance of the Mitsumi business segment. The sales increased 18.9% year-on-year to total JPY 429.1 billion in the fiscal year ending March 2022. This increase was driven by the strong sales growth in optical devices and continued strong performance of analog semiconductors. Operating income came to JPY 41.8 billion, and operating margin was 9.8%. These figures represent a 2.1 times year-on-year increase in operating income and 4.3 percentage point year-on-year increase in the operating margin. Profits for optical devices and analog semiconductors significantly increased, while other businesses saw a decrease.
For the fiscal year ending March 2023, despite having conservative outlook for mechanical components, we anticipate continued growth, mainly in optical devices and semiconductors, and expect further increase in sales and profit. Please turn to the next slide. This slide is showing the Mitsumi business segment's quarterly trend. Net sales decreased 20.2% quarter-on-quarter to total JPY 107.2 billion. While sales of analog semiconductors increased, sales decreased for other products, primarily mechanical components and optical devices, as the peak demand period has passed. Operating income totaled JPY 10.2 billion, while the operating margin was 9.5%. Operating income decreased 33%, and operating margin declined 1.8 percentage points quarter-on-quarter.
This was due to the decrease in profit, caused by decrease in sales of optical devices and mechanical components that I mentioned earlier. Next slide, please. Lastly, I would like to explain the U-Shin business segment. Net sales increased 38.5% year-on-year to total JPY 145.6 billion in the fiscal year ending March 2022. This was due to an increase of approximately JPY 30 billion resulting from a change in the business segments, as well as recovery in sales towards the domestic automotive market. Operating income came to JPY 700 million, and operating margin was 0.5%. This was a 2.3 percentage point improvement year-on-year.
For the fiscal year ending March 2023, in addition to recovering automotive market, we anticipate positive effect from the fixed cost reduction achieved by structural reforms in Europe that we announced in March 2021, and we expect an increase in both sales and profit. Please, turn to the next slide. This slide explains the U-Shin business segment's quarterly trends. Net sales increased 10.3% Q-on-Q to hit JPY 39.9 billion. This was due to partial recovery in automotive production, although the level of recovery varied by regions and customers. Operating profit came to JPY 1.2 billion, and the operating margin was 2.9%, improving by 3.8 percentage points Q-on-Q. This was mainly due to the improvement in the product mix. Please, turn to the next slide.
The bar graph here shows the trend in profit attributable to owners of parent, while the line graph describes the changes in earnings per share. The profit for the period was JPY 68.9 billion. Earnings per share was JPY 170.08. Please go to the next slide. Here is the quarterly trend. The profit for the period was JPY 15.5 billion. Earnings per share was JPY 38.2. Moving to the next slide. Here, I would like to explain the quarterly trend for inventory. At the end of the fourth quarter, inventory totaled JPY 219.3 billion, which was JPY 5.3 billion less than three months ago. This was due mainly to the fact that we were able to consume the inventory that we have built up strategically.
Please move to the next slide. The bar graph on this page is showing trends in net interest, net interest-bearing debt, which is total, interest-bearing debt minus, cash and cash equivalents, as well as line graph showing the free cash flow. At the end of the fourth quarter, net interest-bearing debt totaled JPY 86.9 billion, which improved by JPY 2.5 billion year-on-year. Despite planned expenditures on the new headquarters building acquisition, the cash position is expected to improve in the fiscal year ending March 2023, thanks to our strong ability to generate cash. Moving on to the next slide. This is the summary of, the forecast for the fiscal year ending March 2023. Net sales, operating income, and profit attributable to owners of parent are all expected to reach record highs this fiscal year.
Overall, net sales are expected to increase to JPY 1.2 trillion with businesses growing mainly in ball bearings, motors, analog semiconductors, and optical devices, compensating for falls in sales in LED backlights and mechanical components. Despite various risks, including the Ukraine issue, operating income is expected to exceed JPY 100 billion, thanks to growth in the businesses I have just mentioned, as well as through thorough cost reduction measures across all businesses. The exchange rate is assumed to be at 115 yen to the US dollar. Next slide, please. This slide shows the forecast by business segment. This completes my explanation.
Next, Yoshihisa Kainuma, please.
From my side, I would like to talk about the management policy and business strategy. Next slide, please. The previous year, this was the seventieth anniversary since the foundation and the sixtieth anniversary since we have listed, it was a very commemorative year. As you can see, there were various headwinds. We have been able to exceed JPY 1 trillion of net sales. I think three is the magic number in terms of speech. For two years, about JPY 20 billion or so short of this JPY 1 trillion mark, and this was a bitter experience. However, although we were facing headwinds, we have been able to achieve JPY 1 trillion. From my side, it was a very meaningful achievement. Specifically, the contribution coming from Mitsumi was excellent.
In 2017, we have integrated the management, and in the space of 5 years, we have conducted this. They were suffering from JPY 5 billion of loss back at that time. In the previous year, they were able to generate JPY 43 billion of profit. JPY 48 billion, close to JPY 50 billion of improvement of the performance was what they have been able to achieve. I think this is because we have been focusing on M&A, and we have been focusing on PMI. I think this was a great contributor. Within Mitsumi, the contribution of ABLIC was great as well. That is my judgment at this point. Next slide, please. In terms of the forecast for this fiscal year, in terms of performance, well, this is very difficult.
Every year, the initial forecast for the initial stage for the fiscal year is very, very difficult. This year, various factors are, you know, combined. I think that is actuality. We have the Ukraine situation, and more recently, for instance, for the past one or two months, there were some things that we never imagined, a lockdown in Shanghai, for instance. Then we have this COVID situation. This is very uncertain factors are occurring. Against this backdrop, to be able to make forecasts of what's going to happen in next year, this is very difficult. That said, we have to release a forecast, and I will talk about this in more detail afterwards.
Based on various perceptions, and we will be announcing our forecast for this fiscal year, JPY 1.2 trillion of net sales, operating income of JPY 102 billion. That will be our forecast for this fiscal year. This year's theme, the major theme for this year, will be price revisions. The price of various things are increasing. For instance, not only materials, logistics costs. For instance, a certain, you know, shipping company were able to get a JPY 1 trillion profit. This basically is passed on to the users, we have to pay more. We have to think how we're going to pass on the increased cost to the prices, and I think this is the focal point.
In various industries, we do businesses in various industries, so ball bearings, motors, we do business in various industries. I think overall, the big challenge for this year will be against the rise of raw materials, what type of actions are we going to take? I think that this cost of the raw materials is going to continue for the mid to long term. From our point of view, we have to revise our price. We have to pass on the cost to the prices. I think I imagine that other industries, people working in other industries, will take the action, and I think that's the right thing to do. That is the theme that we have to focus on and for this fiscal year.
In terms of the details of how we have considered about the forecast for this fiscal year, this is on the next slide. I think maybe you remember 2 years ago when COVID emerged and the lockdown has happened, whether it be in Europe, in China, all the countries locked down. When we thought what we should be doing. The intrinsic profit that we should be generating, we should show that and how much stress that we should give on that. Basically, that proved to be true. This, in the fourteenth year when we announced this forecast at the beginning of the fiscal year, more than 100%. Against the initial forecast, the actual result, how was the performance on average, is more than 100%.
We want to achieve more than 100% against initial forecast, and we took the same methodology to set out our targets. We are talking about the three spheres plus one with ball bearings is the core and aircraft related products, and in terms of machine components, that is the machine components business. The analog semiconductors, motors, this is the three spheres among the Eight Spears. We're talking about plus one. This is OIS and sensing. In this sense, last year was due to the shortage of semiconductors, the production at the customer side decreased, and so they suffered from this headwind. This year, the shortage of semiconductors will be resolved. If things go as we plan, I think this will be some of the positive factors that we can consider.
Of course, negative factors, we have to take into account of that as well. Minus JPY 5 billion, we say, we show it at the very bottom below the slide. The gaming-related sales will decline. LED backlights will go down slightly. These four, excuse me, five. Besides the five products, combine all together, and then we'll be able to maybe achieve better. Maybe if everything all combined, it will be -JPY 5 billion is what we are looking. Including all of this, it's JPY + 15 billion. JPY 170 billion, and then put a JPY 5 billion of stress is what we are thinking about. Of course, we have to go through the first half of the year or else we won't be able to actually see what's going to happen.
The China zero COVID policy, we don't know how far they're going to take it at this point. The initial forecast is what we have here, but this is what I want to say. The message is that we're going to achieve more than JPY 100 billion. That is the message that I want to communicate with you. We are quite determined to achieve this target. In terms of Forex, well, Mr. Yoshida talked about this. 115 yen is the assumption. The analog semiconductors, if it's 130 yen continues, then basically we'll be able to achieve better. I think basically you can imagine this happening. These plus and minus. Well, it's not.
We're not just selling ball bearings and not just selling motors, and there will be some ups and downs depending on the products and segments. Basically, this will be the overall outlook, and I think this will not be so far off the mark. This is the slide that I have shown you to make my point about this. The next slide is another major message to you from myself. COVID, essentially, basically, I think, is easing its impact. All around the world, the restrictions against COVID, excluding China that is, it has been relaxed dramatically. The M&A deals that have been moving have started to move forward. We are now able to go to due diligence to various countries and to various sites. The various companies are able to receive us.
Our plants, we can show our plants to people who visit them. In the past two years, basically, these M&A deals did not move. One happened, that is the Shiga factory that we acquired from Omron. That was a sole case. I think going forward, it will go back to a normal pace. This is the yellow portion that I'm talking about. The blue bar is the current midterm management plan, plus, as I was saying, organic growth, plus the M&A is the two wheels that we have. We have been growing from these two initiatives, and we have been able to see the pipeline. There are cases in the pipelines, and I don't know how many are going to close the deal. I don't know. I don't think everything's going to be successful.
The image that I have here is this type of add-on is what we are thinking about.
When you look at this, the image that we have in two years' time would be that we will come close to JPY 1.5 billion in terms of net sales. We are showing this type of number to you today because we do have a certain level of confidence, and you can understand it in that way. Now, for this fiscal year, in a dotted line above 102, there is a dotted box, and this is the gain from the sale of a Mita building. These are some of the additions that we have reflected here. To the right, the yellow portion is purely due to add-ons from M&As.
We should be able to come to a result within that type of the bandwidth, if you like. Frankly speaking, in regards to bearings, and we do have a factory in Shanghai, and so we are impacted by the lockdown in China. We expect a return in June. It will return to where we were for sure. Right now we are being impacted, and so how to catch up here is going to be important going forward. Moving on to the next slide. JPY 365 million, these are the numbers that we have shown. But
If we accumulate the orders that we have received from customers right now, we should make further additions. We are going to build up our ability to produce up to 370 million. We are going to do that. As far as the orders are concerned or the domestic demand is concerned, it's quite strong right now. Next page is showing aviation or aircraft. As we have already mentioned to you already, from the second half of the year, we are expecting a level of recovery to 70% to pre-COVID level. This is based on the data from our sales operation. This has been reflected as a graph.
As you can see from this, we expect a return to a 70% level. We are just saying with this slide that our assumptions remain unchanged. Electronic devices and components, the 3 growth drivers are shown. Backlight module. Right now, due to the semiconductor issue, the production level has come down slightly. We, using product mix, to overcome various headwinds. We've been saying this from the past quite clearly. For the growth this year, it will be motors, mainly for automotive application and also resonant devices. On the next page, this is something that we show each time, and we do sell motors, the active grill shutter actuators.
The one on the far right, stepping motor. These are likely to be a significant drivers for us, and we want to target JPY 300 billion this fiscal year. MMC, MinebeaMitsumi Motors, I used to be a president of that company, and JPY 60 billion-JPY 70 billion of sales were achieved for motors back then. The spindle back then was about JPY 20 billion in total, slightly less than JPY 100 billion was the level. We are now in a position to be able to target JPY 300 billion. Next is in regards to the Mitsumi business. Here too is as you can see on the slide. Moving to the next slide, the analog semiconductors. This fiscal year, the Wuxi and the startup of the Shiga plant.
These are the two major factors. The weak yen that will enable us to generate greater profit, and since we are producing a product in Japan. We don't have the results for April as yet, but we are seeing the yen depreciate quite significantly, and so that is likely to have a notable positive impact. Next slide is the optical device. We want to solidify our position, a number one position, in the market. We've been saying this from the past, I'm not going to repeat. Next page is the U-Shin business. How will the automotive sector recover? That is going to be the key.
If the automotive recovery and if they're able to come up with production plan, and if they were able to produce the product in the next month based on customers demand, then that would lead to profit without question. The structural reform in Europe is making progress steadily. The recovery in the automotive sector is going to be the key here. If things go well, JPY 5 billion. Our plan right now is JPY 4 billion, but we may be able to reach that level. For the next page, we want to explain our initiatives towards carbon neutrality. We have three slides. Fukami, Mr. Fukami from our company is with us. I will ask Mr. Fukami to talk to you directly.
If there are questions from you, in this area, we'll ask Mr. Fukami to also respond. Mr. Fukami, over to you.
Matters related to the environmental issues, myself, Fukami, would achieve the Chief Green Officer work plan. First, the challenge is towards carbon neutrality. In regards to the greenhouse gas emission, about 90% is related to electricity usage, and so decisively important that we secure a renewable energy. For this purpose, we are working on initiatives to install solar panels for our usage. We will endeavor to secure renewable energy by utilizing power purchase agreements such as corporate PPA. Next slide.
We are contributing to reducing greenhouse gas emission of our customers who use our product under the initiative we named MMI Beyond Zero. This initiative, we started to announce numbers from last fiscal year, and we now have the numbers for fiscal year 2021. It was 1.759 million tons in fiscal 2020. In 2021, the level came to 2.489 million tons. In fact, we have been able to make significant improvement of 43%, which is 730,000 tons.
The reason for this increase is that we have seen an increase in sales volume of those product which are subject to the program, as well as buildup of contribution from new product that we started to sell, and also contribution from product that was missing from calculation last fiscal year. We were able to pick up on all these, which has led to this improvement. We will continue to contribute towards reducing the emission of greenhouse gas around the world by expanding sales of our product which have a high energy saving performance. Next slide. In order to promote these challenges towards carbon neutrality as well as MMI Beyond Zero, we are currently planning to issue a green bond.
We're making preparation to issue a green bond to secure funds to invest in production and R&D, as well as to procure decarbonized electricity and to manufacture our ball bearings, which have high energy saving performance, as well as revolutionary precision improvement, as well as the oil bearings used as the main motor for the electric vehicles. We're making that preparation. That concludes my explanation. Thank you.
Thank you. We are now at the last page. In regards to the dividends for this fiscal year, as we say each time, payout ratio of around 20%. This is what we have been showing to you. In the last fiscal year, we paid JPY 36 per share.
If we achieve more than JPY 100 billion this fiscal year, we'd like to target around 40 JPY. The shareholders in our company to be able to increase the dividend stably is something I'm sure the shareholders are expecting, and we are fully aware of this, and we'd like to proceed accordingly. That is my explanation regarding strategy. I would like to conclude my the explanation here.
Next, we'll go into a Q&A session. Those who'll be asking questions will be the institutional investors and analysts who have registered beforehand for the telephone conference system. For those who have questions, please press one after the star on your phone. After you want to cancel a question after you have pressed one after the star, press two. I will call on you one after the other. If you're called upon, please state your question. Please ask your questions one by one. The first question from Goldman Sachs Securities, Takayama-san, please.
Well, thank you very much. Can you hear me? Yes, we can. I have three questions. First of all, Mr. Kainuma talked about the price revisions and price pass-ons.
In terms of material costs and logistics costs, how much is it going up, and how much are you going to pass it on in which products? Can you elaborate on that? This pass-ons, price pass-ons, is it a kind of a one-off request, or are you going to change the business customs? Are we going to set up a scheme that enables you to change the business scheme? Can you elaborate on that? That's my first question.
Yes, I will answer your questions one by one. I'm Kainuma, I'll answer your question. From our side, we sell a lot of product. It's not a kind of umbrella, you know, situation that everything is all the same. But for instance, motors. They are facing a spike of material costs. It's...
I'm not talking about surcharges, but when the cost goes up, we want to pass on the increase. We want to show the increased cost to the customers and then ask to raise prices. When the cost goes down, of course, we will reduce the prices. We want to conduct the kinds of negotiations, and we have started that.
Follow-up. My impression is that the impact on motors seems substantial. If you look at the competitors, in terms of the pass-on, basically, they're trying to pass it on 100%. For the motor business, is that what you're aiming for?
Yes. For the industry to grow healthy, in a healthy manner, I think, we have to increase the prices.
I don't know what, how the competitors are going to behave, but from our point of view, this will be a legitimate request that we're going to make. Because you look at automobiles, the newspapers say that Tesla has increased the prices by $10,000. I watch certain tier one company with a certain director of tier one company, I talk with them, and ultimately Japanese cars will have to raise the prices as well. The tier one director of the tier one company said so. I think basically that will be the trend that we will have to consider.
Thank you. My second question is, compared to the first half to the second half, in terms of the profit, I think there's a difference in terms of the profit is showing different. I think it's page 22.
U-Shin, I think it's skewed to the second half. For electronic components, Mitsumi, for those businesses, the second half seems to generate more profits. What's the reason? Is it the price pass-ons is going to contribute to that? Is a negative factor such as the lockdown that happens in the first quarter? Can you talk more in detail between the balance between the first half and the second half?
This is Kainuma speaking. I will answer your question. Normally, seasonality exists, so the second half normally sales tends to be higher and the profit tends to be higher. That's seasonality. Of course, that's what we're looking at. For this fiscal year, the China lockdown situation around Shanghai, that will be the main reason. The customer supply chain is disrupted.
It's very unclear what's going to happen surrounding the situation. Once this situation ends, the customers will start producing a certain level of volume. This is, I think, the semiconductor industry, because they're not selling as much as expected because they're in inventory. When they start producing again, there is a possibility that the components will be there. Maybe they'll be more skewed in the second half in terms of the sales. That's what we are anticipating right now. Understood. The fourth quarter of last fiscal year, JPY 21.7 billion of operating profit that has been generated. The first half is JPY 41 billion. The first quarter is a little down. It may start from that level. Yes. Yes, I think that's what we're looking at. Understood.
My last question, again, Mr.
Kainuma, I would like, maybe you're the person that's going to answer. In terms of M&A, Mitsumi was a very great success. On the other hand, U-Shin as being able to generate profit at last, but the impact or the contribution coming from the M&A, whether the full contribution is being enjoyed, I think it's a bit late. In terms of M&A for your perspective, what were the lessons learned, and what would be the best way to improve the profitability or the PMI will go smoothly? For your next M&A, when you're preparing for the next M&A, what is your perspective? For U-Shin, well, to be frank, it was a kind of an accident because the semiconductor, the shortage of semiconductors, automotive business has, you know, stacked and nobody anticipated this happening.
If the orders were coming in a normal manner, the profit should have been better. Actually, if the companies are doing only for the automotive sector, the performance is poor. U-Shin, again, the same situation. They are in that kind of environment, so it's unavoidable. Our strength is that automotive is one of our businesses. It's one product, one business that we are engaged in. It's not our lifeline, so to speak. I think that is a strength of a product mix. If the production volume recovers again, U-Shin will be profitable once again. We're talking about JPY 4 billion-JPY 5 billion, we're being conservative. If you look at the strength of U-Shin, I think basically they'll be able to overachieve these numbers, so it's just the external environment that is hindering them.
Well, based on that, in terms of next M&A perspective, you have been talking about you want to strengthen mechanical components business. But with the Mitsumi at the center, you able to increase share in where you didn't have high shares. What will be your idea in your M&A? I talk about Eight Spears. I always talk about the Eight Spears. We're going to strengthen the Eight Spears, and we won't be able to rely too much on the subcore businesses. That's what we want the company to become. I think that's the perspective that we have for M&A. Because I can't talk specifically about these matters, but bear with me.
Thank you.
We'd like to proceed to the next question from Morgan Stanley MUFG Securities. Sato-san, please go ahead.
This is Sato. Thank you for the opportunity. I have three questions. First question is regarding Mitsumi business. The profit last year was an increase of JPY 22 billion last fiscal year. Analog semiconductors and camera actuators, and also the game-related , what were the changes in terms of breakdown? This fiscal year, you're expecting just a slight increase, but in terms of these three products, how do you expect changes for these three products?
Well, it's somewhat difficult for us to explain that in details. Yoshida-san, if you could explain without going into too details.
On a year-on-year basis, the Mitsumi business operating profit was JPY 204.6 billion. This fiscal year was JPY 41.8 billion, increase of JPY 20 billion. Where did this come from? The key drivers were semiconductors accounted for about half of the increase. Next was optical devices. The increase in profit is greater than that for the semiconductor. But these two accounted for a large portion of increase in profit. Conversely, with regards to the gain from two years ago against the profit last fiscal year, we saw a decline. It all put together, there are the positives and negatives, and in the end, we saw JPY 20 billion of profit.
On that basis, what is going to be the situation for the next fiscal year? The previous fiscal year was of the JPY 41.87 billion, and this fiscal year we are saying JPY 43 billion in optical devices. As explained in Kainuma-san's slide, there is going to be a new business opportunity that will lead to increase in sales. As a result of that, we are expecting to see increase in profit. For semiconductors too, in terms of sales, it should increase and the profitability will improve, inclusive of FX, and that is assumption that we have for now. In regards to gains, as was mentioned in this presentation, and there was announcement by customer yesterday.
If you could refer to that as the assumption for the quantity. From our perspective, we are forecasting very conservatively. Put all these together, optical devices, semiconductors will see increase in sales and profit. Gains related to the drop in sales and profit, and about JPY 43 billion if we net all these numbers together. This is the structure. Thank you. The second question is the Mitsumi's performance for FY 2024 or March 2025. It's going to expand, and that is the forecast that you have shown on page 33. What type of product are you expecting to see growth inclusive of the situation for developing new product, what are you assuming?
Also analog semiconductors. In order to enhance and expand this further, what are the missing pieces right now, or what are the pieces that you don't have sufficient amount of? If you could also make some comment about this, please.
Now, this is what we say all the time. JPY 100 billion is we're going to achieve for semiconductors ahead of the original schedule, and the profitability is what you can assume and if you add these up. They will also, or they will all contribute, and OIS too, we do have the roadmap and we will also see those increase. These two will become the kind of a core and other, and what's shown here as number 4, the connectors and switches, that we'll see increases in those products too. The numbers here is not probably an overly surprising type of number.
Understood. Analog semiconductors, you're going to do JPY 100 billion ahead of schedule. On the next page, the operating profit target you set at JPY 30 billion. In order to exceed JPY 100 billion, where do you need to enhance?
If we are to exceed JPY 100 billion, then we need to expand our plant. This is something that we've already talked about previously. From Omron, we have received a Yasu factory, and part of that is refurbished to increase capacity, and that should enable us to achieve JPY 100 billion. The investment for that is at this level. This is something we have already explained previously. The issue is that for us to expand, right now, MEMS, what we are supplying to Omron right now are the first processes needs to be taken out of the companies. This is not something that we can do based on our judgment. We need to have the consent of the counterpart.
If possible, we'd like to create a space there and to introduce that or buy another factory elsewhere. This would be the kind of the form for us to achieve beyond JPY 100 billion.
Let's go to the next question. Mitsubishi UFJ Morgan Stanley Securities, Uchino-san, please.
This is Uchino. Can you hear me?
Yes.
I have two questions. First question is the Mitsumi analog semiconductors business, from the second half of the production capacity is going to ramp up. That's my take. After the enhanced capacity, the product mix, how will be the product mix after the increased capacity? In terms of the market environment, there's a lack of various products and there's a lot of EV related products as well, and MEMS is another product. If you increase your capacity, what is your plan for increasing capacity?
I cannot go into detail, but EV related products, that will be one of the major business offers that we have received. Of course, we will be doing that business. For the other businesses, the battery related business, we do still have capacity. There is a lack of capacity, so we want to increase the production for those products as well.
I think, is this a market that will be growing sustainably? Oh, excuse me, EV. I'm talking about EV. Is this a kind of a sustainably growing market?
Yes, of course, we think so.
Thank you. My second question is. Well, this is a confirmation in terms of how this year's outlook is what you're thinking. As you have said, with the increased cost, how are you going to pass it on to the prices? That will be the focal point. Within your this year's forecast, in terms of the increased cost, is there some sense that you can more or less offset the increased cost by price pass-ons, or is this a kind of a still a risk that remains? Is it a conservative outlook?
Well, in terms of the price pass-ons, how are we going to increase the prices?
We do have a plan internally, and we have already started negotiations with our customers. I cannot go into detail about this matter, but our price increases it is reflected in this year's outlook.
Basically, the cost increase will be more or less offset.
That's a difficult issue because we have to consider Forex. We think that this is a good opportunity. We have no intention to gain a lot of profit. The material cost is going up, the logistic cost is going up. We can prove it immediately. We have to show it to the customers and then persuade the customer so they understand and they feel comfortable to increase the prices, to receive the increased prices. I think that's the most important thing.
Understood. Thank you. Thank you.
If you have a question, please press star one. If you want to cancel your question, please press star two. I would like to go to the next question from Nomura Securities. Akizuki-san, please go ahead.
Thank you. I have two questions. Kainuma-san, you are good at coming up with the forecast. Now I wanted to ask because of that. Now, on this occasion, the supply chain disruption in China, right?
To the extent that you're able to see right now, is there a kind of... Say for example, for automotive application, the customers are wanting to increase production going forward, but I'm asking for the utilization to the load right now. For PC application, I don't know what the situation is right now. In terms of application or based on components, say for example motor, and if you could share information with us as to the current situation.
The impact of the lockdown in Shanghai is likely to be relieved after May. If you could share with us your thoughts in regards to what could occur going forward. Also related to your numbers in China, logistics cost is increasing quite significantly. There are some which are only one-time, but the increases in logistics cost would they be subject to a surcharge as well? Or because it's going to be relatively short-term, is it something that the maker or the manufacturer need to accommodate? If you could explain related to the disruption in China. Well, first of all, my understanding right now is the supply chain issue in China, whether it's applicable to certain industry or first and second, it's not the case.
It's across the board. Generally, automotive stocks are quite significantly down in other areas as well. In the Shanghai region, there is a lack of components and so there is a slowdown. Irrespective of the fact that we produce various type of product, drawdown is quite tough because it does apply to all industries. China is the main location for mass production. A lot of the components for that are also produced in China. In that case, we're now really feeling unevenness. We are seeing slowdown across the board, more or less. In regards to the logistics cost, it's been FOB in the past, not CIF.
Because the logistics cost was low per piece, and that needs to be taken into consideration, and that was taken into consideration to come up with a kind of a ballpark. All of a sudden, the logistics cost just shot up. How could I put it? That tended to have accounted for a much larger portion, which is applying significant stress on the profitability. This must be passed on to the customers because otherwise we'll just build up on the losses the more a product we supply. We are able to prove this to our customers. We are able to show the invoices for the logistics cost, and they would have to understand that it's inevitable.
We want to address that in a kind of a surcharge approach.
Understood. Thank you. Talking about the business. In your material, you're expecting increase in profit for OIS at JPY 3 billion. 30% increase in sales, which is about JPY 40 billion, I assume. The increase in profit seems to be low in comparison to increase in the revenue. The marginal profit at that level or the fixed cost is going to increase in view to increase in production next fiscal year. If you could give some explanation on that, please. This is something that I'd like for you to, I suppose, presuppose because customers are looking at this, I'm unable to say.
From our perspective, this is what we are thinking, and we're making announcement accordingly. If you could forgive me, at this. Understood. Thank you very much. That is sufficient.
I would like to repeat. If you have a question, press star and one. If you want to cancel, press star and two. With this, we would like to end the Q&A session. Once again, please answer to our questionnaire through the link on the screen. Thank you very much for your participation.