Tsubakimoto Chain Co.TSE: 6371

Consolidated Financial Statements for the six-month period ended September 30, 2024

Oct 31, 2024 at 7:46 AM UTC · Issued by Tsubakimoto Chain Co.

Tsubakimoto Chain Co. (6371) CONSOLIDATED FINANCIAL STATEMENTS for the six-month period ended September 30, 2024

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Consolidated Financial Results

for the Six Months Ended September 30, 2024

[Japanese GAAP]

	October 31, 2024
Company name: TSUBAKIMOTO CHAIN CO.
Listing: Tokyo
Securities code: 6371
URL: https://www.tsubakimoto.jp/
Representative: Takatoshi Kimura	President and Representative Director
Inquiries: Yasuhiro Akesaka	Senior Executive Officer, Corporate Planning Department
Telephone: +81-6-6441-0054

Scheduled date to file semi-annual securities report: November 7, 2024

Scheduled date to commence dividend payments: December 2, 2024

Preparation of supplementary material on financial results: Yes

Holding of financial results briefing: Yes

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated Financial Results for the Six Months Ended September 30, 2024 (April 1, 2024 to September 30, 2024)

(1) Consolidated Operating Results				(Percentages indicate year-on-year changes.)
	Net sales	Operating profit		Ordinary profit		Profit attributable to
			owners of parent

Six months ended	Millions of yen	%	Millions of yen		%	Millions of yen	%	Millions of yen	%
September 30, 2024	136,360	5.9	9,459		9.7	11,225	8.3	10,014	37.2
September 30, 2023	128,760	8.3	8,622		2.9	10,364	4.8	7,300	8.1

(Note) Comprehensive income:	Six months ended September 30, 2024:
	Six months ended September 30, 2023:

¥	4,550 million	[	(81.1) %]
¥	24,101 million	[	22.8%]

Basic earnings		Diluted earnings per
per share		share
Six months ended	Yen	Yen
September 30, 2024	94.96	-
September 30, 2023	66.38	-

(Note) As of October 1, 2024, the Company is implementing a stock split at a ratio of three (3) post-split shares for every one (1) pre- split common share. Basic earnings per share is calculated assuming that such stock split was conducted at the beginning of the previous consolidated accounting year.

(2) Consolidated Financial Position

	Total assets	Net assets	Capital adequacy ratio

As of	Millions of yen	Millions of yen	%
September 30, 2024	369,002		252,419	67.8
March 31, 2024	391,298		260,559	66.0
(Reference) Equity: As of	September 30, 2024:	¥	250,032 million
As of	March 31, 2024:	¥	258,400 million

Tsubakimoto Chain Co. (6371) CONSOLIDATED FINANCIAL STATEMENTS for the six-month period ended September 30, 2024

2. Dividends

				Annual dividends

	1st	2nd	3rd		Year-end	Total
	quarter-end	quarter-end	quarter-end

	Yen		Yen	Yen		Yen	Yen
Fiscal year ended March 31, 2024	-		60.00	-		100.00	160.00
Fiscal year ending March 31, 2025	-		99.00

Fiscal year ending March 31, 2025				-		47.00	-
(Forecast)

(Note) Revision to the forecast for dividends announced most recently:	None

(Note)Year-end dividend per share for the fiscal year ending March 31, 2025 (forecast)

Effective October 1, 2024, the Company split its common shares at a ratio of 1 to 3. The year-end dividend per share for the fiscal year ending March 31, 2025 (forecast) reflects the effect of this stock split, and the total annual dividend per share is "-". If the stock split is not taken into account, the year-end dividend per share forecast for the fiscal year ending March 31, 2025 is 141 yen, the annual dividend per share is 240 yen. For details, please refer to "Proper use of earnings forecasts, and other special matters."

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2025(April 1, 2024 to March 31, 2025) (Percentages indicate year-on-year changes.)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Basic earnings
		owners of parent	per share

	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	274,000		2.7	20,000	(5.9)	22,000	(6.2)	20,000	7.8	192.25
(Note) Revision to the financial results forecast announced most recently:	Yes

(Note) Net income per share in the full-year financial results forecast for the fiscal year ending March 31, 2025 takes into account the effect of the stock split. For details, please refer to "Proper use of earnings forecasts, and other special matters."

* Notes:
(1) Significant changes in the scope of consolidation during the period:	None

Adoption of accounting treatment specific to the preparation of semi-annual consolidated financial statements: None
Changes in accounting policies, changes in accounting estimates, and restatement
1. Changes in accounting policies due to revisions to accounting standards and other regulations: None
2. Changes in accounting policies due to other reasons: None
3. Changes in accounting estimates: None
4. Restatement: None
Number of issued shares (common shares)
1. Total number of issued shares at the end of the period (including treasury shares):

September 30, 2024:	111,244,179	shares
March 31, 2024:	111,244,179	shares
2) Number of treasury shares at the end of the period:
September 30, 2024:	8,229,798	shares
March 31, 2024:	3,685,347	shares

3) Average number of shares outstanding during the period:
Six months ended September 30, 2024:	105,456,729	shares
Six months ended September 30, 2023:	109,989,921	shares

(Note) As of October 1, 2024, the Company is implementing a stock split at a ratio of three (3) post-split shares for every one (1) pre- split common share. Total number of issued shares at the end of the period, Number of treasury shares at the end of the period, and Average number of shares outstanding during the period are calculated assuming that such stock split was conducted at the beginning of the previous consolidated accounting year.

Tsubakimoto Chain Co. (6371) CONSOLIDATED FINANCIAL STATEMENTS for the six-month period ended September 30, 2024

Semi-annualfinancial results reports are exempt from review conducted by certified public accountants or an audit firm.
Proper use of earnings forecasts, and other special matters
1. The outlook for consolidated financial results is based on information available at the present juncture and certain assumptions believed to be reasonable. However, it includes risks and uncertainties. Actual business results may differ materially from the figures of the outlook for consolidated operating results due to changes in business conditions, market trends, or fluctuation in currency exchange rates. Furthermore, factors that may affect business results are not limited to those factors.
  (Dividends and financial results forecast after stock split)
  At a meeting of the Board of Directors held on May 14, 2024, we resolved to conduct a stock split, whereby each share of common stock shall be divided into 3 shares effective October 1, 2024. As a result, the dividend forecast and consolidated financial results forecast for the fiscal year ending March 31, 2025, as converted before the stock split, shall be as follows.
2. Dividend forecast for the fiscal year ending March 31, 2025
  Dividends per share at the end of the second quarter 99 yen (Note 1); Year-end 141 yen (Note 2)
  Annual dividend per share for the fiscal year ending March 31, 2025 (before stock split) shall be 240 yen.
3. Consolidated net income forecast per share for the fiscal year ending March 31, 2025: 576.75 yen at the end of the fiscal year. (Note 1) Dividends at the end of the second quarter shall be paid based on the number of shares before the stock split.
  (Note 2) The dividend amount is calculated before the stock split.

Tsubakimoto Chain Co. (6371) CONSOLIDATED FINANCIAL STATEMENTS for the six-month period ended September 30, 2024

Table of Contents - Attachments
1. Analysis of Business Results and Financial Position …………………………………………………………… P. 2
1. Analysis of Business Results ………………………………………………………………………………… P. 2
2. Analysis of Financial Position …………….…………………….…………………………………………… P. 3
3. Discussion of Future Outlook including Consolidated Operating Results Forecast ………………………… P. 4
1. Semi-annualConsolidated Financial Statements and Notes …………………………………………………… P. 5

(1) Semi-annual Consolidated Balance Sheets …………………………………………………………………	P. 5
(2) Semi-annual Consolidated Statements of Income and Interim Comprehensive Income ……………………	P. 7
(3) Semi-annual Consolidated Statements of Cash Flows ………………………………………………………	P. 9

Tsubakimoto Chain Co. (6371) CONSOLIDATED FINANCIAL STATEMENTS for the six-month period ended September 30, 2024

1. Analysis of Business Results and Financial Position

(1) Analysis of Business Results

Regarding the global economy in the six-month period ended September 30, 2024, although the economy in China is in a sustained stagnation as a result of the prolonged real estate slump, the U.S. economy remained robust with strong personal consumption, and even in Europe, the economy is continuing to recover as inflationary pressures ease. As a result of these and other factors, the global economy continued to recover, although moderately. In Japan as well, although there were signs of instability in financial markets, capital investment maintained its underlying strength, and personal consumption began to rise slightly along with improvements in employment and income. As a result of these and other factors, the Japanese economy has begun to recover.

Moving forward, the situation in the global economy is expected to become even more unclear due to various factors such as growing tension in the Middle East, a lagging economic recovery in China, and the presidential election in the U.S. In Japan as well, capital investment is expected to increase in response to digitalization, decarbonization, and labor shortages, although the increasingly unclear situation in the global economy and other factors are expected to keep the economic recovery at a moderate pace.

In such circumstances, the Tsubaki Group will remain focused on achieving the Mid-term Management Plan 2025, and concentrate on rolling out various measures with an awareness of capital costs, while also bolstering manufacturing and strengthening the earning power of our existing businesses, as well as moving forward with the development of new businesses that will lead to sustainable growth.

As a result, orders received by the Tsubaki Group for this six-month period were up 4.9% year-on-year to ¥137,621 million, and net sales increased 5.9% year-on-year to ¥136,360 million.

Operating income increased 9.7% year-on-year to ¥9,459 million, and ordinary income increased 8.3% year-on- year to ¥11,225 million, while net income attributable to parent company shareholders increased 37.2% year-on- year to ¥10,014 million.

Segment results are summarized as follows:

[Chains]

In the Chains segment, net sales increased year-on-year due to such factors as a rise in sales in Japan, and the effects of the weakening of the yen.

The segment recorded a year-on-year increase of 3.1% in orders received to ¥45,214 million, and a year-on-year increase of 0.9% in net sales to ¥46,343 million, although operating income decreased 8.5% year-on-year to ¥7,247 million due to a rise in various costs.

[Motion Control]

In the Motion Control segment, net sales increased year-on-year due to such factors as a rise in sales in Japan, South Korea, and Taiwan, despite a fall in sales in the Americas, Europe, the Indian Ocean Rim, and China. The segment recorded a year-on-year increase of 7.2% in orders received to ¥11,024 million, and a year-on-year increase of 2.2% in net sales to ¥11,126 million, although operating income decreased 37.7% year-on-year to ¥145 million due to a rise in parts purchasing costs as a result of the weakening of the yen.

[Mobility]

In the Mobility segment, net sales increased year-on-year due to factors such as an increase in the sales of timing chain systems for automobile engines and other items at bases including in the Americas, Europe, and South Korea. The segment recorded a year-on-year increase of 7.5% in orders received to ¥44,257 million, a year-on-year increase of 10.1% in net sales to ¥44,681 million, and a year-on-year increase of 14.9% in operating income to ¥3,684 million.

Tsubakimoto Chain Co. (6371) CONSOLIDATED FINANCIAL STATEMENTS for the six-month period ended September 30, 2024

[Materials Handling Systems]

In the Materials Handling Systems segment, although there was a decrease in sales of metalworking chips handling and coolant processing systems in Europe, sales of systems for the automotive industry increased in the Americas, and sales of bulk handling systems and systems for the logistics industry and automobile industry increased in Japan. These and other factors resulted in a year-on-year increase in net sales.

The segment recorded a year-on-year increase of 3.4% in orders received to ¥35,781 million, and a year-on-year increase of 9.8% net sales to ¥32,944 million. Even so, the segment recorded an operating loss of ¥106 million (operating loss of ¥1,637 million in the same period of the previous fiscal year).

[Other]

Other orders received increased 0.8% year-on-year to ¥1,341 million. However, net sales decreased 7.8% year-on- year to ¥1,264 million, and the Group recorded an operating loss of ¥504 million (operating loss of ¥433 million in the same period of the previous fiscal year).

Analysis of Financial Position (Assets)
Total assets at the end of the six-month period ended September 30, 2024 were ¥369,002 million, down ¥22,295 million from the end of the previous consolidated fiscal year.
Current assets totaled ¥193,288 million, a decrease of ¥12,565 million from the end of the previous consolidated fiscal year, mainly due to a decrease of ¥8,737 million in cash and deposits and a decrease of ¥4,914 million in electronically recorded monetary claims, despite an increase of ¥1,022 million in other current assets due to an increase in prepaid expenses.
Non-current assets amounted to ¥175,714 million, down ¥9,730 million from the end of the previous consolidated fiscal year. The decrease was partly attributable to a ¥7,975 million decrease in investment securities due to the fall in market values of securities held by the company and other factors, a ¥953 million decrease in property, plant and equipment, and a ¥752 million decrease in intangible fixed assets.

(Liabilities)

Liabilities were ¥116,583 million, down ¥14,155 million from the end of the previous consolidated fiscal year. This decrease was partly attributable to a ¥3,361 million decrease in electronically recorded monetary obligations, a ¥2,555 million decrease in other non-current liabilities due to a decrease in deferred tax liabilities and other factors, a ¥2,061 million decrease in notes and accounts payable, a ¥1,809 million decrease in borrowings, a ¥1,455 million decrease in non-operating electronically recorded monetary obligations, a ¥1,193 million decrease in other current liabilities due to a decrease in accounts payable-other and other factors, and a ¥1,079 million decrease in provision for bonuses.

(Net assets)

Net assets were ¥252,419 million, down ¥8,140 million from the end of the previous consolidated fiscal year, and the equity ratio was 67.8%. This was attributable to numerous factors, including a ¥6,429 million increase in retained earnings and a ¥922 million increase in foreign currency translation adjustments, despite a ¥9,085 million increase (decrease in net assets) in treasury stock acquired, etc., and a ¥6,796 million decrease in valuation difference on available-for-sale securities.

Tsubakimoto Chain Co. (6371) CONSOLIDATED FINANCIAL STATEMENTS for the six-month period ended September 30, 2024

(Cash flow status)

Cash and cash equivalents (hereafter referred to as "cash") at the end of the six-month period ended September 30, 2024 amounted to ¥64,821 million, down ¥9,833 million from the end of the previous consolidated fiscal year.

Respective cash flows and their causes are as follows:

(Cash provided by operating activities)

Net cash provided by operating activities was ¥11,718 million (¥18,250 million in the same period of the previous fiscal year). This was attributable to various factors such as income before income taxes and minority interests of ¥14,007 million, depreciation and amortization of ¥7,006 million, and a ¥5,207 million decrease in trade receivables, which offset a ¥6,148 million decrease in accounts payable, income taxes paid of ¥4,723 million, and a gain on sale of investment securities of ¥2,781 million.

(Cash used in investing activities)

Net cash used in investing activities was ¥6,233 million (¥4,669 million in the same period of the previous fiscal year). This resulted from factors such as ¥6,333 million being used for the acquisition of fixed assets, and ¥2,094 million being used for the acquisition of shares of subsidiaries and associates, despite an income of ¥2,987 million from the sale of investments in securities.

(Cash used in financing activities)

Net cash used in financing activities was ¥15,251 million (¥7,501 million in the same period of the previous fiscal year). This resulted from various factors such as ¥9,150 million used to acquire treasury stock, ¥3,621 million used to pay for dividends, and a ¥1,987 million decrease in borrowings.

(3) Discussion of Future Outlook including Consolidated Operating Results Forecast

Based on the actual results for the six-month period ended September 30, 2024 and the current outlook, we have revised the full-term consolidated results forecast announced on May 14, 2024, for the fiscal year ending March 31, 2025, as below.

The exchange rate used for the second half of this fiscal year, which is an assumption on which the full-term consolidated business results forecasts are based, is set at 1 USD=145 JPY, and 1 Euro=155 JPY.

Revised full-term consolidated results forecast for the fiscal year ending March 31, 2025 (April 1, 2024 - March 31, 2025)

	Net sales	Operating	Ordinary income	Net income	Net income per
	income	share

Previously released forecast (A)	Millions of yen	Millions of yen	Millions of yen	Millions of yen	Yen
280,000	23,000	24,000	22,000	208.86
(Released May 14, 2024)

Revised forecast (B)	274,000	20,000	22,000	20,000	192.25

Increase/(Decrease) (B-A)	(6,000)	(3,000)	(2,000)	(2,000)	―

Percentage increase/(decrease) (%)	(2.1)	(13.0)	(8.3)	(9.1)	―

(Note) Effective October 1, 2024, the Company split its common shares at a ratio of 1 to 3. Net income per share in the full-term consolidated results forecast for the fiscal year ending March 31, 2025 reflects the effect of the stock split. The net income per share forecast for the fiscal year ending March 31, 2025, not reflecting the stock split, will now be 576.75 yen (the previous forecast was 626.57 yen).

Tsubakimoto Chain Co. (6371) CONSOLIDATED FINANCIAL STATEMENTS for the six-month period ended September 30, 2024

2. Semi-annual Consolidated Financial Statements

(1) Semi-annual Consolidated Balance Sheets

					(Millions of yen)
				As of March 31, 2024	As of September 30, 2024

Assets
	Current assets
		Cash and deposits	77,321	68,583
		Notes and accounts receivable - trade, and contract	47,095	47,202
		assets

		Electronically recorded monetary claims -	20,255	15,340
		operating

		Securities	603	733
		Merchandise and finished goods	26,217	25,947
		Work in process	16,959	17,433
		Raw materials and supplies	14,980	14,603
		Other	3,359	4,381
		Allowance for doubtful accounts	(938)	(936)
		Total current assets	205,853	193,288
	Non-current assets
		Property, plant and equipment

		Buildings and structures, net	34,534	34,042
		Machinery, equipment and vehicles, net	35,888	34,749

		Tools, furniture and fixtures, net	4,373	4,569
		Land	38,533	38,588

		Construction in progress	5,612	6,038
		Total property, plant and equipment	118,942	117,988
		Intangible assets
		Goodwill	1,216	1,056
		Other	7,688	7,095
		Total intangible assets	8,904	8,152

		Investments and other assets
		Investment securities	47,052	39,077
		Retirement benefit asset	298	320
		Other	10,354	10,282
		Allowance for doubtful accounts	(106)	(106)
		Total investments and other assets	57,598	49,573
		Total non-current assets	185,444	175,714
	Total assets		391,298	369,002

Tsubakimoto Chain Co. (6371) CONSOLIDATED FINANCIAL STATEMENTS for the six-month period ended September 30, 2024

				(Millions of yen)
			As of March 31, 2024	As of September 30, 2024

Liabilities
	Current liabilities
		Notes and accounts payable - trade	18,592	16,530
		Electronically recorded obligations - operating	14,699	11,337
		Short-term borrowings	4,183	4,354
		Current portion of long-term borrowings	5,801	3,180
		Income taxes payable	2,906	2,161
		Provision for bonuses	6,133	5,054
		Provision for loss on construction contracts	179	112
		Provision for shareholder benefit program	46	10
		Electronically recorded obligations - non-	2,809	1,353
		operating

		Other	22,148	20,954

		Total current liabilities	77,499	65,050
	Non-current liabilities
		Bonds payable	15,000	15,000
		Long-term borrowings	3,728	4,368
		Provision for retirement benefits for directors (and	144	145
		other officers)

		Retirement benefit liability	12,497	12,695

		Asset retirement obligations	600	611
		Other	21,267	18,711

		Total non-current liabilities	53,238	51,533
	Total liabilities	130,738	116,583
Net assets
	Shareholders' equity

		Share capital	17,076	17,076
		Capital surplus	12,582	12,598

		Retained earnings	185,285	191,714
		Treasury shares	(4,375)	(13,460)

		Total shareholders' equity	210,568	207,928
	Accumulated other comprehensive income
		Valuation difference on available-for-sale	25,667	18,871
		securities

		Deferred gains or losses on hedges	(61)	88

		Revaluation reserve for land	(10,597)	(10,597)
		Foreign currency translation adjustment	31,991	32,913

		Remeasurements of defined benefit plans	831	827
		Total accumulated other comprehensive income	47,831	42,103
	Non-controlling interests	2,159	2,386
	Total net assets	260,559	252,419

Total liabilities and net assets	391,298	369,002

Tsubakimoto Chain Co. (6371) CONSOLIDATED FINANCIAL STATEMENTS for the six-month period ended September 30, 2024

(2) Semi-annual Consolidated Statements of Income and Comprehensive Income

		(Millions of yen)
	For the six months	For the six months
	ended September 30, 2023	ended September 30, 2024

Net sales	128,760	136,360
Cost of sales	91,855	97,289
Gross profit	36,905	39,070
Selling, general and administrative expenses	28,283	29,610
Operating profit	8,622	9,459

Non-operating income

Interest income

Dividend income

Foreign exchange gains

Settlement received

Other

Total non-operating income

Non-operating expenses

Interest expenses

Foreign exchange losses

Loss on valuation of derivatives

Restructuring expenses

Other

Total non-operating expenses

Ordinary profit

Extraordinary income

Gain on sale of investment securities

Total extraordinary income

Extraordinary losses

Impairment losses

Loss on valuation of investment securities

Loss on valuation of shares of subsidiaries and associates

Total extraordinary losses

Profit before income taxes

Income taxes - current

Income taxes - deferred

429	700
811	1,147
525	-
636	-
503	812

2,906	2,660


159	139
-	357
476	-
260	-
267	398
1,164	894

10,364	11,225


1,192	2,781
1,192	2,781

124	-
502	-

120	-

747	-


10,809	14,007

3,249	3,808

253	160

Total income taxes	3,503	3,968

Profit	7,306	10,039
Profit attributable to non-controlling interests	5	24
Profit attributable to owners of parent	7,300	10,014