Yorozu CorporationTSE: 7294

FY2024 Mid-Year Financial Results

Jan 31, 2025 at 5:18 PM UTC · Issued by Yorozu Corporation

Tsutomu Hiranaka, President & COO

FY2024 First-Half Financial Results

Tokyo Stock Exchange Prime Market (Securities Code: 7294)

Note:

This is an internal English translation of the document originally issued in Japanese, created for the convenience of English-speaking readers. In the case of any discrepancies, the Japanese version will take precedence.

Contents

FY2024

Ⅰ . First-Half Financial Summary Ⅱ. First-Half Results

Ⅲ. Full-Year Performance Forecast Ⅳ. Shareholder Return

Ⅴ. Pathways to Performance Improvement Ⅵ. Topics

Ⅰ . FY2024 First-Half Financial Summary

Financial Summary for the First Half of FY2024

FY2024 1H Results

・Increased sales and decreased profits. Despite an increase in sales attributed to exchange rate effects, operating income dropped by 74.3% year on year because of a decline in the production volumes in Japan, China, and Thailand, and the quality costs incurred in the U.S.

・Sound financial status is maintained through funding based on appropriate planning.

FY2024 Outlook

・Though the exchange rates contribute to increasing our earnings, we anticipate a decrease in both sales and profits because of a significant decline in the production volumes of major customers.

・Ordinary income is also expected to decline due to exchange rate loss arising from depreciation of certain foreign currencies.

・Net loss is anticipated as a result of advancing the structural reforms announced in YSP2026.

Shareholder Return

FY2024 dividend information

Interim: 15 yen (determined)

Annual: 31 yen (planned) (up 1 yen from the annual dividend of 30 yen in FY2023)

Ⅱ. FY2024 First-Half Results

[First Half] FY2024 Consolidated Financial Summary (Year-on-Year)

Million yen	1H FY2023	1H FY2024	Year-on-Year


Sales	84,259	90,942	+7.9%

Operating Income	470	120	(74.3)%

Ordinary Income	754	(1,958)	-

Net Income*1	58	(2,588)	-

*1 Net income attributable to owners of the parent

	1H FY2023	1H FY2024	Difference	Percentage
	A	B	B-A	of Change
Net Income per Share	2.42 yen	(106.25) yen	(108.67) yen	-

Exchange Rate Applied to	134.98 yen/$	152.36 yen/$	17.38 yen/$	12.9%
Consolidated Statements

Sales: The increase is attributed to exchange rate effect and depreciation of the Japanese yen offsetting the contraction of production volumes in Japan and Asia.
Operating income: The decrease is mainly due to quality costs incurred in the U.S.
Ordinary income: The decrease is due to impact of the exchange rate.
Net income: The decrease is due to the decline in ordinary income among other factors.

[First Half] Consolidated Sales by Customer (1H FY2023 vs. 1H FY2024 Results)

100,000	90,942

84,259
	Honda
Honda
	Toyota
Toyota
50,000
Nissan	Nissan

0
FY2023 actual	FY2024 actual

Million yen

-570

（-5.2％）

+4,121

（+53.2％）

+3,674

（+6.8％）

Customer	1H FY2023	Share	1H FY2024	Share
Nissan Gr.*	53,799	63.8%	57,473	63.2%
Toyota Gr.	7,741	9.2%	11,862	13.0%
Honda Gr.	10,911	12.9%	10,341	11.4%
Isuzu Gr.	4,068	4.8%	3,043	3.3%
Mazda	1,540	1.8%	2,093	2.3%
VW	1,246	1.5%	1,947	2.1%
Mercedes Benz	1,060	1.3%	1,131	1.2%
Kubota	1,429	1.7%	995	1.1%
SUBARU	880	1.0%	976	1.1%
Suzuki	843	1.0%	714	0.8%
Others	742	1.0%	367	0.5%
Total	84,259	100.00%	90,942	100.00%

* Includes sales to Renault and Mitsubishi

Sales to more than half of our customers increased compared with the first half of FY2023.
Growth of sales to Toyota is prominent.

[First Half] Analysis of Impact on Consolidated Operating Income

(1H FY2023 vs. 1H FY2024 Results)

Million yen

Operating income (down 350)

Decreased units

(other than China)

Decreased

units (China)

Dies and

equipmentLaunch of Quality costs

YSMC

(U.S.)

Streamlining	Others
efforts	(One time)

FY2023 results

FY2024 results

Although our streamlining efforts managed to offset the costs from the launch of YSMC, impact from the reduced number of vehicles in production led to the decrease in our operating income.

[First Half] Sales and Operating Income by Region	Before Consolidation Adjustment
◆Sales	Japan		(1H FY2023 vs. 1H FY2024 Results)
The Americas	Asia	Million yen
	(1,547)	+9,764	(2,936)	Difference
80,000	Percentage of
	(5.2)％	+27.0％	(12.6)％		change

			45,926
40,000	29,632	28,085	36,162
23,353
	20,417


0

◆Operating		(2,017)		(569)		+836
Income
(76.4)％		-％		-％
3,000	2,641

0		624				86

			(578)	(1,147)	(750)
(3,000)
	FY2023	FY2024	FY2023	FY2024	FY2023	FY2024

Japan: Both sales and profits declined due to the reduced number of vehicles produced and YSMC launch costs.
The Americas: While business with Toyota pushed up sales, poor performance in the U.S., including the quality costs incurred, resulted in an increase in earnings and decrease in profits.
Asia: Despite the impact of the decrease in production volumes, cost-cut measures such as reduction of depreciation costs led to an increase in profits while sales declined.

Financial Standing for the Six Months Ended September 30, 2024

(Million yen)		Mar. 31, 2024 A	Sept. 30, 2024 B	Difference (B-A)
Net Worth			66,070		65,432	(638)	(1.0)%
Equity Ratio			46.4%		44.1%	-	-
Interest-bearing Debt	D/E ratio	0.51	33,389	0.57	37,584	4,195	12.6%
Net Interest-bearing Debt	Net	0.17	11,102	0.24	15,595	4,493	40.5%
D/E ratio

Total Assets	142,257	148,364	6,107	4.3%
(Million yen)	Sept. 30, 2023	Sept. 30, 2024	Difference (B-A)
Total A	Total B

Cash Flow from Operating	5,504	(561)	(6,065)	(110.2)%
Activities

Cash Flow from Investing	(3,629)	(6,031)	(2,402)	-
Activities

Cash Flow from Financing	(4,167)	2,157	6,324	-
Activities

D/E ratio remains stable under appropriate fund-raising plans.
	Copyright © YOROZU Corporation		10

(Ref.) Consolidated Balance Sheet Summary for the Six Months Ended September 30, 2024

						Cash & bank deposit	(299)
		Mar. 31, 2024	Sept. 30, 2024	Difference		Notes & accounts receivable	3,117
	Million yen	A	B	B-A		Inventories	1,031
						Other current assets	366
	Current Assets	75,373	79,525	4,152		Tangible fixed assets	2,908
	Fixed Assets	66,884	68,839	1,955		Investments & other assets	(937)

						Notes & accounts payable	(115)
Total Assets	142,257	148,364	6,107
	Electronically recorded	(739)
						obligations
	Current Liabilities	49,815	51,695	1,880		Short-term debts	66
	Fixed Liabilities	16,949	21,041	4,092		Long-term debts due within	(389)
		one year
						Others	2,645
Total Liabilities	66,764	72,736	5,972
	Shareholders' Equity	58,394	55,590	(2,804)		Long-term debts	2,019
		Others	2,036
	Other Accumulated	7,676	9,841	2,165		Net income	(2,588)
	Comprehensive Income
					Dividend payment	(412)
	Non-controlling Interests,	9,421	10,195	774		Other securities valuation	(794)
	etc.
					difference
Total Net Assets	75,493	75,628	135
	Currency translation	3,100
Total Liabilities and Net Assets	142,257	148,364	6,107		adjustment

Ⅲ. FY2024 Full-Year Performance Forecast

[Full Year] Consolidated Financial Forecast Summary for FY2024

	FY2023	FY2024	Difference	FY2024	Difference
Million yen	Actual A	Forecast B	B-A	Forecast C*2	B-C
Sales	181,468		177,000	(-2.5％) (4,468)	180,000	(-1.7％) (3,000)

Operating Income	4,459		(1,200)	(5,659)	4,500	(5,700)

Ordinary Income	4,517		(3,800)	(8,317)	2,750	(6,550)

Net Income*1	(3,926)		(17,000)	(13,074)	1,050	(18,050)

		*1 Net income attributable to owners of the parent	*2 Figures estimated as of Aug. 9, 2024

	FY2023 Actual		FY2024 Forecast	Difference	Percentage
	A				B	B-A	of Change
Net Income per Share	(162.07) yen			(696.79) yen	(534.72) yen	-

Exchange Rate Applied	140.66 yen/$			151.68 yen/$	11.02 yen/$	7.8%

Sales: The decrease is due to large scale production cuts at major customers despite impact of yen depreciation.
Operating income: The drop is due to the spike in energy prices, labor costs, and quality costs incurred.
Ordinary income: The fall is due to the exchange loss from the depreciation of certain foreign currencies.
Net income: The decline is attributed to the recording of an impairment loss of fixed assets.

[Full-Year] Consolidated Sales by Customer (FY2023 Actual vs. FY2024 Forecast)

200,000

160,000

120,000

80,000

40,000

181,468

Honda

Toyota

Nissan

177,000

Honda

Toyota

Nissan

Million yen	Customer		FY2023	Share	FY2024	Share
		Nissan Gr.*		119,142	65.7%	112,640	63.6%
		Toyota Gr.		16,408	9.0%	21,781	12.3%
-1,016		Honda Gr.		21,628	11.9%	20,612	11.6%
（-4.7%）
		Isuzu		8,181	4.5%	5,473	3.1%
+5,373		Mazda		4,024	2.2%	3,986	2.3%
（+32.7%）
		VW		3,040	1.7%	3,892	2.2%
-6,502
（-5.5%）		Mercedes Benz		2,088	1.2%	1,943	1.1%
		Kubota		2,597	1.4%	1,873	1.1%

		SUBARU		1,722	0.9%	1,815	1.0%
		Suzuki		1,763	1.0%	1,374	0.8%
		Others		875	0.5%	1,611	0.9%
		Total		181,468	100.0%	177,000	100.0%

*Includes sales to Renault and Mitsubishi

Notable growth of sales to Toyota

FY2023 actual

FY2024 forecast

[Full-Year] Analysis of Impact on Consolidated Operating Income

Million yen

(FY2023 Actual vs. FY2024 Forecast)

Operating income (down 5,659)

Decreased units

(other than China)

Streamlining	Decreased
units (China)
efforts
	YSMC
	launch costs
	Quality costs
	(U.S.)		FY2024
		Dies &
		forecast
		equipment Cyberattack
FY2023	(One time)	damage	Others


results		(One time)

Large scale production cuts in countries such as Japan, the U.S., China, and Thailand,

and temporary expenses are the reasons for the drop in operating income.

[Full Year] Sales and Operating Income by Region Before Consolidation Adjustment

(FY2023 Actual vs. FY2024 Forecast)

◆Sales	Japan	The Americas	Asia	Million yen
	(8,300)	+9,177	(9,434)	Difference
120,000	(12.3)%	+11.8%	(19.1)%	Percentage
of change

80,000	67,622		77,633	86,810
59,322
				49,357
					39,923

40,000
0
◆Operating	(5,145)		(890)	(1,295)
Income
(83.3)%		--%	(84.1)%
8,000	6,180
4,000		1,035			1,539
				244

0
(4,000)			(1,329)	(2,219)

	FY2023	FY2024	FY2023	FY2024	FY2023	FY2024

Japan: Lower sales of dies/equipment and YSMC launch costs are expected to reduce sales and profits.
The Americas: Sales are expected to increase but profits are to decrease because of poor performance in the U.S. along with temporary quality costs, even though sales to Toyota are growing.
Asia: Both sales and profits are expected to decrease due to lower number of units despite streamlining efforts.

Capital Investment and Depreciation

25,000

20,000

15,000

10,000

5,000

Million yen

Capital Investment by Region

Japan	Americas	Asia

			12,931
				10,455
7,219		6,997

	3,367
FY2020	FY2021	FY2022	FY2023	FY2024

Depreciation by Region

Japan

Americas

Asia

10,246	9,880	9,814

	8,903	7,994

FY2020 FY2021 FY2022 FY2023 FY2024

Ⅳ. Shareholder Return

Shareholder Return
(Dividends: Yen/Share)			271.5%	Dividends paid as announced
			though profits fell on an
100		Interim					impairment loss


		Year-end
		Commemorative			51.6%
75		Payout Ratio							42.4%

			35.5%	35.4%					35.6%	The increase in ordinary income
										offsets the net loss from an
										impairment loss and leads to the
50					18					increase of dividends.
						Payout ratio turns negative			Payout ratio turns negative
		20.1%	19				due to the net loss			due to the net loss
	10.2%				16	23
25	5			40

									17	16
	11	40					13

						7	18

	10	11	34	18	25	23	12	13	6	7	13	15
0

2013	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023	2024
											Forecast
26 yen	51 yen	53 yen	58 yen	59 yen	46 yen	25 yen	13 yen	13 yen	25 yen	30 yen	31 yen

60%

45%

30%

15%

We strive to ensure a dividend payment of at least 31 yen per share with a payout ratio of 35% or more.

V. Pathways to Performance Improvement

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