My name is Katsuhiko Yoshida. I would like to explain the consolidated financial results for the first quarter of the fiscal year ending March 2026. First, regarding numerical notation, figures were previously presented in units of millions or billions of yen. Starting from Q1 of the fiscal year ending March 2026, figures will be presented in units of billions of yen to provide a clearer overview of financial performance. The further details on this change can be found in the disclaimer on page 26. Consolidated net sales for Q1 of FY March 2026 was up 3.2% year-on-year and down 2.1% quarter-on-quarter to total JPY 366.9 billion. Operating income down 7.8% year-on-year and down 19% quarter-on-quarter to total JPY 17.4 billion. Profit for the period attributable to owners or parent decreased by 17.2% year-on-year and decreased by 35.8% quarter-on-quarter to total JPY 10.9 billion. Both net sales and operating income exceeded the budget.
Quarterly net sales hit a record high. Due to the appreciation of yen, there were negative effects impact. To be more specific, JPY -13.2 billion on net sales quarter-on-quarter and JPY -11.8 billion year-on-year. Operating income also saw a negative impact of JPY 1.8 billion quarter-on-quarter and JPY 4 billion year-on-year. This shows a quarterly trend in net sales, operating income, and OP margin. The OP margin for the first quarter was 4.8%, down 0.5 percentage point year-on-year and down 0.9 percentage point quarter-on-quarter. This shows a difference between the forecast as of May and actual results for net sales and operating income by business segment for the first quarter. Net sales for PT exceeded expectations due to strong performance in data center application and robust sales for automotive bearings. MLS exceeded expectation driven primarily by HDD motors and motor for automotive applications. SE significantly exceeded expectations mainly due to strong sales in mechanical components and semiconductors.
AS exceeded expectations especially in access products and automotive devices. Operating income for PT exceeded expectations primarily due to the effect of increased sales. MLS was generally in line with expectations. SE significantly exceeded expectations mainly due to strong performance in mechanical components and semiconductors. AS was above expectations. This slide shows the quarterly trend of Precision Technologies segment. Left graph shows quarterly sales trend and right bar graph shows averaging income and line graph shows OP margin. First quarter net sales decreased 2.9% QoQ to total JPY 64.8 billion. Sales of ball bearings were down 1.2% quarter-on-quarter to total JPY 43.6 billion. The monthly external shipment volume increased 11.3% QoQ for an average of 265 million units. Driven by strong growth in data center related demand, external shipment volume hit a record high. Sales of rod-ends and fasteners totaling JPY 15 billion were down 8.3% over the previous quarter.
Sales of electronic devices decreased 1% QoQ to total JPY 6.2 billion. Operating income for the quarter totaled JPY 14 billion and the operating margin was 21.5%. On a quarter-on-quarter basis, operating income remained nearly flat while the operating margin improved by 0.5 percentage points. Looking at the results by product, we saw an increase in operating income for ball bearings. This slide shows a quarterly trend for the motor, lighting, and sensing segment. Net sales totaled JPY 105.1 billion, an increase of 3.8% QoQ. By product, sales of motors amounted to JPY 80.2 billion, which was in line with the previous quarter including resonant devices due to the segment change. Sales of electronic devices including smart products resulting from the segment change reached JPY 14.9 billion, an increase of 71.8% from the previous quarter. Sales of sensing devices totaled JPY 8.4 billion, down 9.3% QoQ.
Operating income came to JPY 5.1 billion with an operating margin of 4.8% quarter-on-quarter. Operating income increased by 6.8% and operating margin rose by 0.1 percentage points.
This slide shows the quarterly trends in the semiconductor and electronics segment. Net sales totaled JPY 117.2 billion, which was a decrease of 3.6% compared to the previous quarter. This was mainly due to the decline in sales of optical devices and the impact of the segment change related to smart products, despite sales increasing for mechanical components. Operating income came to JPY 2.3 billion, operating margin of 1.9%. Compared to the previous quarter, operating income decreased by 30.1% with operating margin falling by 0.7% points. This slide shows the quarterly trends for the access solution segment. Net sales came to JPY 78.9 billion, decreasing by 6.5% compared to the previous quarter. Operating income came to JPY 2.7 billion with operating margin of 3.4%. Compared to the previous quarter, operating income had decreased by 48.1% with operating margin falling by 2.8% points.
The bar graph here shows the transitions in profit attributable to owners or parent, and the line graph shows the changes in earnings per share on a quarterly basis. The profit for the quarter was JPY 10.9 billion and earnings per share was JPY 27.1. Next is about the changes in inventory on a quarterly basis. At the end of the first quarter, inventories came to JPY 370.8 billion, which was an increase of JPY 19.9 billion compared to three months ago. This was mainly due to the strategic buildup of inventories needed for the expected increase in sales from the second quarter onwards. On this slide, the bar graph is showing the transition in net interest-bearing debt, which is total interest-bearing debt minus cash and cash equivalents, and the line graph showing free cash flows.
At the end of the first quarter, net interest-bearing debt came to JPY 252.7 billion, increasing by JPY 11.3 billion compared to the end of March 2025. Regarding free cash flows for the fiscal year ending March 2026, we currently have not factored in any M&A-related expenditures. The risk scenario for the fiscal year ending March 2026, initially announced in May, has been revised, and the base scenario remains unchanged. The exchange rate assumption is JPY 140 to the dollar. This slide shows the forecast by business segment using the base scenario. This slide shows the forecast by business segment using the risk scenario. This is all for my presentation.
Next, over to you, Mr. Kainuma. I would like to talk about important points for today's briefing. I would like you to read what is written on this slide. Q1 finished better than our expectation. Reciprocal tariff, in actuality, did not have a major impact on our business. Having said that, however, as you may be aware, 15% tariff on automotive, we don't know when it will begin. Employment statistics, according to what I hear, there seem to be many differences. There is a range to the projections. At the end of Q1, I think it will be risky to fix the projection at this point in time. The minimum level has risen to some extent. That is how I would like you to understand. In November, when we announced our earnings in November, I should be able to share with you more solid numbers.
Having said that, however, for some reasons, we are enjoying good performance. More recently, July, August, and September, this momentum is likely to continue. The only problem or the burden on businesses are subcore businesses. I will come back to this point later on. On the other hand, Thailand and Cambodia conflict in that region has been reported by media. Both countries have agreed to cease fire, and the actual impact is quite negligible. On a monthly basis, JPY 50 million - JPY 60 million additional cost has incurred. However, when the conflict intensified, I was visiting Thailand and Cambodia. The separation of politics and economy, the high-ranking officials of the government of both countries seem to agree on that. Therefore, I myself am confident that logistics or the flow of goods will be resumed in the near future. The next topic is the reciprocal tariff.
As you can see here, what we make in the U.S. and sell in the U.S. amount to JPY 160 billion. Only JPY 40 billion we export to the U.S. JPY 180 billion shown underneath that is the amount of a transaction we make outside the U.S. Our products coming into the U.S. in the form of finished products amounts to JPY 180 billion. The top right and bottom right do not matter. Only JPY 40 billion is the amount that matters. 80% of the customers we have been able to pass on the additional cost to them, a surcharge system. $1.34 million was the additional cost incurred in Q1. On a quarterly basis, if the current situation prolongs, the amount may increase going forward. We are negotiating with remaining customers, and our policy is to pass on the additional cost 100% to the customers.
It may take more time, but when things become clearer, I would like to report to you. Next page, please. As you can see here, actually compared with Q1 of the previous year, about the profit, subcore businesses, in other words, the game consoles and OIS. Down JPY 3.1 billion. I will give you more details later on. If this had remained flat, it would have been the record high Q1 profit. Core business, I feel safe in saying the core businesses achieved a record high performance in November. Our growth drivers, for example, the LiDAR, which is fully automotive driving and drone and humanoid. These three, I will be able to share with you future projections, and it seems quite promising. Humanoid at CES to be held in January, our humanoid products, or our products for humanoid will be exhibited at the CES to be held in January.
What we are working right now, the hand for humanoids. Our products are differentiated from our competitors' products, and such hands will also be exhibited. Our core business is likely to further expand going forward. Moving on to the next page, the bearings are enjoying excellent business. Production hit the record high, and the monthly plan, 24 million units, has been exceeded. In the second half of the year, 340 million units per month, which is the record high monthly production we are aiming to achieve. The people working in the field are highly motivated, and order intake is quite good. The bearings and firm orders for data centers and automotive bearings are doing well as well. Pivots are also doing well. PMC, or machined components, are doing extremely well.
The only thing that is lagging behind in production is a rod-end and CNA, the medical, is at the low level. FX is moving in the negative direction, but right now, we are enjoying excellent performance. Profitability is improving. Next page, please. This is something you may be already familiar with, fan motors , a cooling system for data centers. Even though the method changes, the demand for motors is quite solid. Our high-performance bearings, there is still good room for further expansion. That was about the bearings. Next page, please. The motor, lighting, and sensing. The motors are doing extremely well as well. Fan motors will enjoy a high margin this year. Even if we do not renew the record, something very close to that can be achieved. HDD is really solid as well. High additional value products are being produced. Backlight has finally hit the bottom.
Tablet, the volume is expected to grow going forward. We will be able to contribute to our profitability. Automotive, in my opinion, innovative display will be launched and the mass production has started. I mean, full-fledged mass production will begin next year, but the backlight has definitely hit the bottom.
For the smart products, a battery protection module that is also performing very strongly. Focus for the next fiscal year in detail will be explained come November. Without question, this will become a strong profit driver next fiscal year. That's the kind of segment that this is starting to turn into. Next is regarding SE. The first page is concerning semiconductors. The power device, the price correction is making steady progress, though it is somewhat gradual, but profitability has been recovering. We did have some issues at the front line for power device, but that has already been corrected and has not led to being a major issue. The former, the OMRON group, the Shiga plant, the MEMS [microphones] or the non-contact , the temperature sensors, they are likely to contribute towards profitability going forward. Semiconductor, some actually struggling very much if you look elsewhere.
Despite the strong headwind in various areas, we are continuing to maintain high profitability. That is because we are focusing on the niche market. We are able to really strongly appeal our strength. That has enabled us to achieve these results. The next page, this is the subcore and something that we need to explain today. If you look at the bar graph on the right, the first quarter last year was JPY 18.9 billion. You have a slight amount of subcore profit at operating income on top. If you look at the first quarter, you can see that the contribution is negative. This negative, the range, and if you compare that to the profit contribution in the first quarter last year, that's about JPY 3.1 billion if you add the two.
Why did we perform poorly was because for the optical device, we had the rare earth issue where the capacity utilization in our factory came down quite significantly. The export, the approval from China for rare earth did not come all that easily. We have been collaborating with customers, and not from China, but in Vietnam. We have been molding the components in Vietnam and bringing that in. That's the kind of thing that we are doing right now. Becoming rare earthless, in other words, not using a rare earth. We have been producing samples of that type of product to customers right now and just waiting for approval by the customers for such a product. From June, we have been able to resume production. There is still that uncertainty in regards to the parts supply. It's somewhat volatile. This is likely to see a bit of pushback.
The full year, the sales number has not changed. The customers have not changed. From our perspective, after August, we want to certainly catch up. That is where we are. Even for now, more than 80% or so, we have come back, but not quite back to 100% as yet. Next week, I will be visiting the local operation, and I intend to check up on their situation. That's the situation regarding optical devices right now. It will take some more time, but it's a matter of time. The productivity or the production front line, they have already implemented countermeasures. As long as we are able to source the components, we shouldn't see much issue. For mechanical components, from ICU, we have made a release on that. It's been less than JPY 150.
The parts that we procured when the yen was weak, and because of the appreciation of the yen, we have ended up incurring loss associated with currency translation. From the second quarter onwards, we should be able to overcome this issue and generate income on the profit as we have planned. That's the plan for now. The first quarter, the level of contribution was quite low. July, August, and September, if the exchange rate remains stable, then we shouldn't be impacted significantly and should be able to generate a profit as scheduled. We have been able to confirm to that level. As for the Access Solutions, we saw a wonderful productivity improvement. Whether it be paint for the critical processes, the improvement in the productivity, that has gone really well. The profit, the contribution is biased towards the second half of the year.
From our perspective, something that we have been doing for a number of years, the high margin products. Designing for the automotive until launch, often it takes two or three years. It's time-consuming. They are starting to launch the market, then that will translate to volume. This year, we had various issues. For example, the reciprocal tariff for the China issue. For now, we should be able to generate profit as expected. European players, because of the slower car sales in China, that has caused a bit more of a struggle for the European players. From our perspective, we've seen the productivity improvement and launching products with a higher margin. Through these measures, we intend to overcome the Tsubaki Nakashima, there's been various things, but as you can see on the slide, we intend to do this business. This is for humanoid.
Smaller, high precision, so the double way or the positioning, that will become necessary going forward. Our strength, we should be able to leverage our strength for this type of component. In that regard, a quality issue did occur for Tsubaki Nakashima, but the outcome has all been cleared with the customers and have been able to confirm that we didn't cause the practical issues. As a consequence, we'll be undergoing this type of procedure. The second point is we have divested in the U.K. subsidiary of the Honda Tsushin Kogyo. It's a small company, but not much point for us to keep the company, so we decided to sell this company. Page 25 is regarding dividends. Last year, we paid JPY 20 at the interim period, but this year, we have decided to pay JPY 25. The payout ratio improved from 20% to around 30%. This was changed in our policy.
If everything goes the same for the end of the year, we should be able to also pay about the same amount, leading to increasing dividend amount for the full year. There are still some areas where things are not transparent at this point in time. On this occasion, we decided only to explain the interim dividend amount. That is all for me. Thank you very much.
Next, we would like to have the questions and answers session. The first question is from Mr. Takayama of Goldman Sachs. Please begin.
Thank you very much for this opportunity. Can I continue?
Yes, I can hear you.
I have two questions. First, on page 17, how to read this slide. So SE risk scenario, the SE, Q2 seems to be higher. Rather than the risk, is this a realistic profit projection? The PT seems to go down in Q2, but is it actually higher than this? A more realistic profit level of these four segments, I would like to understand. There may be ups and downs. My question is about the profit level in Q2.
First of all, these numbers were put together rather automatically for the first half. It's a first half forecast minus Q1 results. As you pointed out, these numbers may not be totally realistic in some cases.
How they would be by segment, roughly speaking, in Q1, the published number, JPY 14 billion and JPY 17.3 billion, so JPY 3.4 billion up. It may be compensated in Q2, which is not really right. Inclusive of that, PT, the numbers shown here, the base scenario, based on base scenario, I mean, risk scenario are quite similar, but please refer to base scenario numbers. So JPY 13.5 billion. In actuality, Q1 was JPY 13.9 billion, so JPY 14 billion. In Q2, it will be higher than JPY 14 billion. The reason is, as Kainuma explained, that previously bearings are doing extremely well. Road end, the medical applications, or some European production sites have negative factors, but PT as a whole is doing quite well. The numbers should be higher than this. MLS, these numbers per se, JPY 6.9 billion profit in Q2. This number will be somewhat better than this.
The reason for that is motors and sensing devices as well as backlights are basically improving QoQ. That is a main reason. Within SE, there are some ups and downs. PT and MLS in that sense, the numbers may be a bit conservative, but SE, for some items, the numbers may be conservative, and for some others, it's not conservative. For example, optical devices, it's not conservative. The first half overall, OIS production, may go down a little bit. That is a negative factor. However, as Kainuma explained earlier, more recently, rare earth issues are likely to be solved. In August onwards, inclusive of Q3, the full year numbers should remain more or less the same. Coming back to Q2, semiconductors and mechanical components are likely to have upside. The total numbers in net, the total numbers are likely to be better than the ones shown here.
AS are virtually the same as these numbers. Overall picture, I would like you to understand in that way.
I see, understood very well. My second question is, Mr. Kainuma talked about expectations for three items: drawn, humanoid, and what was the other one? Humanoids, Mr. Kainuma commented several times, like JPY 30 billion in 2030. Mr. Kainuma, I think he was not completely sure about that, but now it's clearer. Am I right in assuming that way? What are the changes you have experienced?
The three items: LiDARs for autonomous driving, camera, radars, LiDARs. There are three methods: San Francisco, the Waymo running in San Francisco, and Amazon-related autonomously driven cars have LiDARs. Of course, the cameras are also installed, but the LiDARs detect the obstacles. Our PMC, the mechanical components, bearings, and many others are used.
If that method becomes the mainstay or the mainstream, we will be able to see huge business opportunities. What's being talked about is Tesla will use cameras, the current Tesla models, too. Whether the humans touch steering wheels, I mean, if it is completely autonomous, the human drivers will not be behind the wheel. It's going to be quite interesting. Humanoids. CES, we are serious about exhibiting our products at CES in order to see people's reactions, motors, sensors. We have received many inquiries. Eight Spears, all of Eight Spears. It's like we are getting all of Eight Spears. The issue is 1.4 million units in 2030 we are speaking about. Simple addition will be 3 million units. The humanoids, I mean, I'm not sure whether the number of humanoids will reach that kind of number. Many startups already are working on this.
Regarding bearings, to a certain startup, we supply 170 units of bearings to one humanoid. It's like an aggregate of bearings, not only bearings, small-sized motors and sensors, the various things. I would like to share with you more details in November. Today, I wanted to give you a heads up.
A follow-up question. Looking back, I think you have received many questions from investors about the business portfolio and how to increase top line, etc. Eight Spears plus or comprehensive approach, has it become clearer, sharpened up? Profit margin is another factor. How you are sharpening your vision?
What we aimed at, ultra precision is the social bar strings. Robotics, it's not that we want to handle all kinds of robots, but the robots with ultra precise movements, we would like to use our products in them. Humanoids, 1.4 million units.
It's not that all of them will use our products. One way or another, things will accelerate. What we have, we will be presenting lots of samples in order to judge what people will become interested in. The sensors, the pressure sensors we have, and we have received many inquiries and shipped many samples. If this becomes a smashing hit, then we can put it on a mechanical component and supply it to our customers in a combined manner, starting with a DVD and smaller-sized laptop computers and smartphones. In the new era, new things are launched. Now, the three of them have come out altogether.
We'd like to proceed to the next question from Morgan Stanley MUFG Securities, Sato-san. Please ask your question.
This is Sato from Morgan Stanley MUFG Securities. First question, and it's about the numbers for bearing the sales volume. I understand that there will be an increase in the second quarter as well. For the first quarter and the second quarter, the monthly sales volume, both internal and external. For the second half of the year, 340 million production is what you're expecting, which is record. When do you intend to increase the production? What is the current production capacity right now? This is the first question, please.
Based on the actual, starting with April, is it okay?
Yes.
External shipment volume: 253, 266, 276. That's for April, May, and June. For internal sales, actuals were 47, 47, and 49. After July, 276, 272, 279. The internal sales: 46, 52, 52. On the production side, from April: 283, 300, 308, 333 for July, 335, and 321. October onwards, when we have many operating days, we will exceed 340.
That was what Kainuma-san was talking about in terms of realizing a record high. For the capacity, as we have been explaining from the past, about 400 million units. It does depend on the product mix as well, but that is what we're able to do. Even if we produce 340 million, we still have some spare capacity.
Thank you very much. My second question is the optical device in the first quarter. You've explained that it was quite tough. Is there any changes to the full-year forecast? In the second and third quarter, how do you intend to see that pick up in terms of the curve?
In terms of sales, the first quarter was a very low start.
It's difficult to refer to a specific number, but about 20 million. The second quarter was upwards of 60 billion. In the third quarter, probably similar types of number. In the fourth quarter, it will come down again. That's the kind of transition that we're expecting as far as numbers are concerned. Just to confirm, for the full year, the forecast remains unchanged. No, it doesn't. It remains unchanged. There are some changes in numbers in terms of second and third quarters. Added to that, as we have explained before, the numbers we have explained as a part of the guidance. We are subtracting the first quarter number from the first half number. If you could make some adjustment in that regard as you put together the model. From August onwards, the production has normalized. Is that right? The production itself, as Mr. Kainuma has explained, has normalized.
It's essentially whether we are able to source the materials or not. That's just the point. What will happen in terms of sourcing the raw materials, I think, will potentially change the situation. It's really up to them.
That was clear. Thank you very much.
I repeat, if you have any questions, please use the raise hand button on the screen. Let us move on to the next question. Mizuho Securities, Mr. Goto, please begin.
This is Goto from Mizuho Securities. Can you hear me?
Yes.
Thank you for your explanation. I have two questions. One is about the external sales projection of bearings. Recently, the past record has been exceeded. By application, there are some differences in level, but it's coming back. Automotive structural increase, how possible that is? The segments that have not made complete may come back going forward. The possibility of such improvement, should I assume, or what is your thought on that?
First of all, the recent situation, as you rightly pointed out, the data center related quite robust China and external sales. This trend is likely to continue. On the other hand, the automotive, depending on the OEM, the situation may be different, but inclusive of content growth, things are growing.
If the production volume remains the same, 5% to 7% or 8%, the bearings for automotive applications will grow. We maintain the same forecast. This trend will probably continue next year onwards. Fan motors, as Kainuma explained, CAGR 17%, CAGR can be expected 18% or 17.8%. In 2027 or 2028, big growth can be expected. However, the cooling system, innovations are happening on a daily basis. Whether this will remain the same for some time, I don't know. It's going to be even more high performance. As autonomous driving spreads, the additional devices will become necessary. Likewise, 5% - 8% CAGR is likely. We maintain such forecasts. In addition, as for the major changes in recent times, drones and robotics, growths are related to those. There seems to be high potential. Drones are more than 30% CAGR is likely to be actualized.
That is my answer for your question about robotics. Some use 170 units of our products or other robots that may be simpler. Some may be quite similar to human bodies. We are now scrutinizing how we can capture business opportunities. At this point in time, it's rather difficult to quantify the business opportunities.
Understood. Thank you. My second question is about the smart products, DVU. The demand is growing, I understand. AI servers, data center servers, the power consumption is increasing. Therefore, business opportunities are likely to grow going forward. What is your take on this?
Yes. As you are aware, every quarter, we are making revision, like particularly power storage related or the battery related. The customers are enjoying good business. We need to secure a production capacity in order to follow up their demand. We need to implement a broad range of measures about the future.
The battery protective module, in addition to that, there are various peripheral businesses. As Kainuma mentioned, there are many business opportunities that we can seize regarding that. In November, we will be able to share more information with you. The customer base is expanding. Yes. As you may be aware, we have one very strong customer as a core customer. In addition to that one, the automotive, and we will be expanding our product lineup in order to increase our business.
I say understood. Thank you.
We'd like to proceed to the next question from UBS Securities. Hirata-san, please ask your question.
This is Hirata from UBS Securities. Thank you for the opportunity.
Yes, please go ahead.
I have two questions. The first question is regarding SE. In the first quarter, you actually exceeded by JPY 2.7 billion. That was the semiconductors, the mechanical components. Can you give the quantitative breakdown? In terms of semiconductors, there was a kind of rush demand prior to the tariff increase, I believe. From the second quarter onwards, you said it's going to be strong. Could you give more details in terms of the field of the application and also the upside for the mechanical components? It depends on the customers' product. How should I think of the upside?
In terms of mechanical components, how much upside is there? It's not included here.
We are looking at it quite conservatively right now. In that regard, if the mechanical component customer ends up making upward revision to production, and if we are able to capture that business opportunity, there should be some upside that can be expected. In terms of semiconductors, as to whether there is a brought-forward demand or not, our product is such that it is more a niche top customized type of product. We're not expecting anything significant in that regard. From the first quarter, we have continued to receive quite strong numbers. That's the situation for semiconductors. For [BB] as well, we have the analog and power. The situation being different from the two for bat analog, the numbers are quite strong. 1.2, for example, is where we are seeing right now. For the optical devices, as against the expectations, it was weaker.
You have to do the math to come up with the numbers.
Thank you. In the first quarter, semiconductors and the mechanical components upside, it was more the upside from the semiconductor that was more significant. Are you talking in terms of profit?
In terms of profit, yes, the semiconductors were very strong. In terms of application, the strong application was related to smartphones.
Could you give some information in that regard?
Smartphones were strong. We received strong inquiries outside North America as well. Mobile, I think, in general, we are receiving strong business. For power devices as well, it was quite good in the first quarter as well. IGBT, for example, rather than IGBT, the other type of the power semiconductors, say, for example, the air conditioner application, they were quite strong. Even in IGBT, we also do the trains, electrical, railway.
We have received strong inquiries there as well, which has showed strong numbers too.
Thank you. My second question is, again, for SE segment. I understand that you struggled in the first quarter. The second quarter, July is looking somewhat tougher. Unless the export from China is resumed, the situation will remain difficult. Do you have expectations for supply to increase rapidly from areas outside China? If you are to procure from outside China, would there be additional costs incurred? Is there anything that could potentially be a risk?
In terms of additional costs, not in terms of the unit price of the product to be procured. There needs an approval and management cost is required. There are some costs incurred on a one-time basis, but these can be resolved. Overall, it's negligible. What we are trying to do is, of course, to be moving away from China.
The [DY], the most important metal, and not to use that, to becoming a [DY] list. If we're able to do that, we no longer have to use the restricted product. Hopefully, we're able to resolve this issue from such a perspective. As far as the course of direction is concerned, not just ex-China, we have multiple plans through which we are trying to resolve the situation. That's where we are right now.
Understood. Thank you.
Because the time is limited, the next question will be the last one. Nomura Securities, Mr. Akizuki.
Akizuki from Nomura, thank you very much. Briefly, I would like to confirm the numbers. First, MLS. Year on year, the profit margin last year was 5.2%, and this year is down to 4.8%. HDD did very well. I thought it would be higher than this. The profit margin, what is the reason why profit margin declined year on year? If you could explain, please.
HDD, the customers' numbers and our numbers because of supply chain inventory adjustment, there is a difference. From customers' consolidated financial results, we assumed our numbers, and our numbers seem a bit weak. Our share is not 100%, but inventory adjustment that comes in between the two, and there is a lag, time lag. As for Q1 numbers, Akizuki-san, your assumption for Q1, probably our assumption was somewhat weaker. As was explained at the outset, it did better than the assumption or expectations.
The same applies to full-year expectations. For HDD, we took a conservative view. 10% year on year, 10% decline year on year for motors as a whole. That
That is our assumption. The [Q1] , there was inventory adjustment. Looking at the situation from customers and numbers, it was rather weak.
Thank you for that. My second question is, PT is very strong. By application, you explained the numbers, so I understand the overall situation, but if it is possible, can you explain the bearings or by application, the breakdown?
I would like to explain that. Q1, QoQ , the breakdown: Automotive, 19%. Space and aircraft, 39%. Home appliances, 39%. OA, 3%. PC and peripherals, 2%. Motors, 18%. Amusement, 1%. Others, 16%. QoQ , [growth rate]. Well, year on year , if possible, please. A utomotive, - 9%. Space and aircraft, + 11%. Home appliances, -1 2%. OA, - 12%. PC and peripherals, - 10%. Motors, + 26%. Amusement, - 4%. Others, - 10%.
I see. The motors, data center, and air conditioners, it's included in [CE]. Should I take it as the motors in general?
Yes, exactly.
I see. I understood. Thank you.
We'd like to conclude the Q&A section. With this, we'd like to conclude the earnings presentation explanation. After the close, a questionnaire screen will be shown. This is going to be an important feedback for our activities, so I ask that you respond to this questionnaire. Thank you very much for your participation today.
Thank you.