Consolidated Earnings Report for the Third Quarter of Fiscal 2022

Jan 27, 2022 at 7:08 AM UTC · Issued by Koito Manufacturing Co., Ltd.

[Japanese GAAP]

January 27, 2022

Company Name:	KOITO MANUFACTURING CO., LTD.
Stock Listing:	First Section, Tokyo Stock Exchange
Code Number:	7276
URL:	https://www.koito.co.jp
Representative Director:	Michiaki Kato, President
Inquiries:	Hideharu Konagaya, Senior Managing Director
Tel:	+81-3-3443-7111
Filing of Quarterly Securities Report:	February 2, 2022
Scheduled Payment of Dividends:	－
Supplementary explanatory materials prepared:	None
Explanatory meeting:	None

(¥ millions are rounded down)

1. Consolidated Results for the Third Quarter of Fiscal 2022 (April 1, 2021 to December 31, 2021)

(1) Consolidated Operating Results		(¥millions; percentage figures represent year-on-year changes)
Third Quarter	Net sales	Operating income	Recurring profit	Profit attributable to
owners of parent

Fiscal 2022	552,397	10.6%	38,325	12.3%	43,263	16.9%	27,463	25.6%
Fiscal 2021	499,523	△	34,115	△	37,003	△	21,859	△
	17.4%	44.9%	42.1%	49.9%

Note: Comprehensive income or loss: December 31, 2021: ¥39,701 million (19.6%),

December 31, 2020: ¥33,198 million (△30.4%)

Third Quarter	Net income	Net income
per share (¥)	per share (diluted) (¥)

Fiscal 2022	170.86	170.81
Fiscal 2021	136.00	135.96
(2) Consolidated Financial Position			(¥ millions)
	Total assets	Net assets	Equity ratio	Net assets
	(%)	per share (¥)

December 31, 2021	814,479	599,518	69.5	3,523.98
March 31, 2021	782,163	569,438	68.7	3,344.65

Note: Equity: December 31, 2021: ¥ 566,446 million, March 31, 2021: ¥ 537,605 million

2. Dividends

				Dividend per share (¥)
	First Quarter		Second Quarter		Third Quarter	Year End	Full Year
Fiscal 2021	－	20.00		－	30.00	50.00
Fiscal 2022	－	24.00		－
Fiscal 2022(forecast)								－	－

Notes: 1. Revisions to recent dividend forecasts: None

2. The dividend record date is March 31, as prescribed by KOITO's Articles of Incorporation; the dividend forecast for the March 31, 2022 is currently undecided.

3. Forecast of Consolidated Results for Fiscal 2022 (April 1, 2021 to March 31, 2022)

				(¥	millions; percentage figures	represent	year-on-year changes)
							Profit attributable to	Net income
	Net sales		Operating income	Recurring profit	per share
		owners of parent
							(¥)

Full year	743,000	5.2%	52,000	△8.3%	56,000	△8.4%		35,000	△6.9%	217.74

Note: Revisions to recent consolidated business forecasts: Yes

*Notes

Changes to important subsidiaries during the third quarter (changes in specified subsidiaries resulting in revised scope of consolidation): None
Application of special accounting methods in the preparation of quarterly consolidated financial statements: None
Changes in accounting principles, accounting estimates and restatements

① Changes in accounting policies in conjunction with revisions to accounting standards: Yes

②Other changes: None

③Changes in accounting estimates: None

④Restatements: None

Note: For details, please refer to the attached material P.10 "2. Quarterly Consolidated Financial Statements and Notes (4)Note Regarding Changes in accounting policies in conjunction with revisions to accounting standards (Note Regarding Changes in accounting policies in conjunction with revisions to accounting standards)"

(4) Number of shares issued (common stock)

① Number of shares issued (including treasury stock):

②Number of treasury stock:

③Average number of stock during the third quarter:

Fiscal 2022, 3Q	160,789,436	Fiscal 2021	160,789,436
Fiscal 2022, 3Q	48,835	Fiscal 2021	53,614
Fiscal 2022, 3Q	160,738,748	Fiscal 2021, 3Q	160,734,739

*This quarterly financial report is not subject to the quarterly audit procedure to be conducted by certified public accountants or auditing firms.

*Explanations concerning proper use of business forecasts and other noteworthy matters (Notes on future assumptions)

The above forecasts are based on information available, and certain assumptions that are judged to be reasonable, at the time of the release of this report. KOITO is not promising that the Company will achieve these forecasts. Actual results could differ from forecasts due to a variety of factors.

The exchange conversion rate based on the business forecast for fiscal 2022, the year ending March 2022 is calculated as 1.0 US$ = ¥109.8 and 1.0 CNY = ¥17.1.

For Reference Only 》

Forecast of Non-consolidated Result for Fiscal 2022 (April 1, 2021 to March 31, 2022)

(¥ millions; percentage figures represent year-on-year changes)

	Net sales	Operating income	Recurring profit	Net income	Net income
	per share (¥)

Full year	298,000 △4.5%	17,500 △17.2%	37,000	△3.1%	28,000 △26.4%	174.19
Note: Revisions	to recent non-consolidated	business forecasts:	Yes

Table of Contents of Supplementary Materials

1. Qualitative Information Concerning Quarterly Financial Statements and Other Matters……………………………….	2
	2
(1) Explanation Regarding Consolidated Operating Results……………………………………………………………	22
(2) Explanation Regarding Consolidated Financial Position…..……………………………………………………..…	22
(3) Explanation Regarding Forecast of Consolidated Results for Fiscal 2022 and Other Future Projections………………2
2. Quarterly Consolidated Financial Statements and Notes…………………………………………………………………	4
(1) Quarterly Consolidated Balance Sheets………………………………………………………………………………	5
	4
(2) Quarterly Consolidated Statements of Income and Comprehensive Income……………………………………………6
Third quarter, for the nine months ended December 31………………………………………………………………	6
(3) Quarterly Consolidated Statements of Cash Flows………………………………………………………………………
(4) Notes on Quarterly Consolidated Financial Statements………………………………………………………………	8
10
(Going Concern Assumption) ………………………………………………………………………………………	10
(Note Regarding Significant Changes in Shareholders' Equity)……………………………………………………	10
(Note Regarding Changes in accounting policies in conjunction with revisions to accounting standards) ………… 10
(Segment Information)………………………………………………………………………………………………	11

1. Qualitative Information Concerning Quarterly Financial Statements and Other Matters

(1) Explanation Regarding Consolidated Operating Results

The economic condition of Japan and overseas in the consolidated cumulative period of third quarter of fiscal 2022 has stagnated with a gradual recovery due to such factors as the continued effects from the shortage of semiconductors, a rise in material prices, stagnation of the supply chains and confusion of the distribution network, in addition to the re-expansion of infections caused by variants of COVID-19, where the outlook continues to remain in an uncertain condition.

The domestic automobile production volume considerably increased in the first quarter due to the recovery from the COVID-19 effects of the previous period. However, the production volume of the cumulative period of this third quarter has decreased year on year due to a shift towards reduced production caused by the shortage of semiconductors and confusion of the supply chains since the second quarter. Overseas, although a drastic recovery was indicated in Europe, ASEAN, India, and other countries where there were significant effects from COVID-19 in the previous period, the global automobile production volume only increased slightly year on year, because there were countries that are still facing the effects of the shortage of semiconductors, the same as Japan.

In this climate, the net sales of this third quarter decreased 4.7% year on year in Japan. Overseas, due to the production increase and new orders in North America, Asia and other regions in addition to the effects of exchange conversion rates, net sales of the same period increased 32.2% in North America, increased 4.7% in China and increased 32.1% in Asia, where consolidated net sales increased 10.6% year on year to ¥ 552.3 billion.

(2) Explanation Regarding Consolidated Financial Position

While the accounts receivable decrease, total assets at the end of this third quarter increased by ¥ 32.3 billion from the end of the previous fiscal year to ¥ 814.4 billion due to an increase in cash, deposits and investment securities, etc.

Total liabilities ended at the same level as the previous fiscal year end at ¥ 214.9 billion.

Total net assets increased ¥30.0 billion from the end of the previous fiscal year to ¥599.5 billion due to an increase in the retained earnings by the quarterly net profit attributable to owners of parent, and increase in the translation adjustments by the weakened yen.

-2. Analysis of cash flow

Cash flows from the operating activities provided ¥45.2 billion (third quarter of the previous fiscal year: ¥49.3 billion) after payment of taxes, mainly reflecting the net income before income taxes of ¥42.9 billion and depreciation of ¥25.8 billion.

Net cash provided by investing activities resulted in payments of ¥32.2 billion (third quarter of the previous fiscal year: proceeds of ¥1.1 billion) as a result of proceeds from time deposits of ¥86.1 billion, payments into time deposits of ¥91.7 billion, and acquisition of property and equipment of ¥21.0 billion.

Financing activities resulted in net cash loss of ¥7.7 billion (third quarter of the previous fiscal year: payment of ¥16.1 billion) the result of mainly reflecting the dividends paid of ¥9.4 billion.

As a result, the balance of cash and cash equivalents at the end of the period increased by ¥6.2 billion from the end of the previous fiscal year to ¥168.1 billion.

(3) Explanation Regarding Forecast of Consolidated Results for Fiscal 2022 and Other Future Projections

Regarding the KOITO's business forecast for the fiscal 2022, while a decrease of the global automobile production volume is anticipated year on year due to the continuous shortage of semiconductors and stagnation of the supply chains, the net sales are expected to increase 5.2% year on year due to the effect of new orders and exchange conversion rates.

Regarding profits, although we have been promoting improvements and rationalization in domestic and overseas continuously, the operating income is expected to decrease 8.3% year on year, the recurring profit decrease 8.4%, and the net income attributable to the owners of the parent decrease 6.9% due to a rise in material prices, increase in the fixed costs accompanying the sudden fluctuation in production, and investment in R&D for the future.

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