Earnings Release Conference FY2023

(April 2023 to March 2024)

April 26, 2024

Murata Manufacturing Co., Ltd.

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26 April 2024

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Topics (1/2)

Financial Results of FY2023

Revenue

  • Revenue were 1,640.2 billion yen, down 2.8% year on year. Although revenue from Capacitors increased for mobility and smartphones in addition to increases in High frequency modules and SAW filters, that from Lithium-ion secondary batteries and connectivity modules decreased.
  • Actual revenue outperformed the latest forecast for smartphones and computers.

Operating Profit

  • Operating Profit was 215.4 billion yen down 27.8% year on year. In addition to a decline in the operation rate and a fall in product selling prices, an impairment loss for manufacturing machineries, etc. for cylindrical type lithium-ion secondary batteries was recognized.
  • Operating profit failed to reach the latest forecast due to the expansion of productivity loss from lower capacity utilization in addition to the impact of the impairment loss.

Shareholder returns

  • The Company plans to pay a year-end dividend of 27 yen per share for FY2023, an increase of 2 yen per share from the previous forecast.

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Topics (2/2)

Projected Financial Results for FY2024

Revenue

  • Revenue are planned to be 1,700.0 billion yen, up 3.6% year on year. Whereas revenue from lithium-ion secondary batteries and connectivity modules is expected to decrease, revenue from components is forecast to increase for applications, centered on mobility and computers.

Operating Profit

  • Operating Profit are planned 300.0 billion yen, up 39.2% year on year. Profit-increasing factors such as an improvement in the operation rate and a cost reduction are expected.

Capital expenditures

  • Capital expenditures are planned to be 190.0 billion yen, down 29.5 billion yen year on year and will decrease mainly for investment in land and buildings, but investments will continue for a production increase of components in preparation for a future expansion in demand for components.

Shareholder returns

  • Annual dividend is planned to be 54 yen per share, an increase from the previous fiscal year.
  • As a shareholder return measure, the company will carry out Stock Repurchase(up to 80.0 billion yen).

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Financial Results

of FY2023

From April 2023 to March 2024

Consolidated Basis

26 April 2024

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Financial Results Overview for FY2023

  • Revenue increased for mobility and smartphones, but decreased for power tools, PCs and industrial equipment.
  • Operating profit fell as a result of recording an impairment loss of 49.5 billion for manufacturing machineries, etc. for cylindrical type lithium-ion secondary batteries in addition to the decline in the operation rate and the fall in product selling prices (down 11.2% excluding the impairment loss).

FY2022

FY2023

Projections(October)

(B JPY)

(%)

(B JPY)

(%)

FY2023

(B JPY)

(%)

Y on Y Change

(B JPY)

(%)

Impact of exchange rate

(B JPY)

Constant Currency

basis

(B JPY)

(%)

Change

vs Projections

(October)

(B JPY)

(%)

Revenue

1,686.8

100.0

1,620.0

100.0

Operating profit

298.2

17.7

270.0

16.7

Profit before tax

302.7

17.9

298.0

18.4

Profit attributable to

243.9

14.5

225.0

13.9

owners of parent

ROIC (pre-tax basis) (%)

14.4

12.3

1,640.2

100.0

  1. 13.1
  1. 14.6

180.8 11.0

10.0

(46.6)

(2.8)

+91.4

(138.0)

(8.2)

+20.2

+1.2

(82.8)

(27.8)

+45.7

(128.5)

(43.1)

(54.6)

(20.2)

(63.3)

(20.9)

(58.6)

(19.7)

(63.1)

(25.9)

(44.2)

(19.6)

(4.4)

(2.3)

Average exchange rates

135.48

143.00

144.62

yen/US dollar

*Exchange rate sensitivity (per 1 JPY/US$ change per year) Revenue :10.0 BJPY Operating profit : 5.0 BJPY

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Overview of impairment loss for lithium-ion secondary batteries

Events leading to recognizing impairment loss

  • The Company made investments in a production increase for the future in anticipation of a demand expansion in the market. Demand rose due to the COVID-19 pandemic but resulted in a sharp decline. The resultant inventory adjustment was more prolonged than expected. Consequently, demand plunged, which led to a fall in profitability.
  • As a result of estimating the recoverable amount according to International Financial Reporting Standards (IFRS), the estimates turned out to be below the book value. Accordingly, the Company recorded an impairment loss of 49.5 billion yen in connection with the relevant manufacturing machineries, etc.

Initial assumption

Market

Rapid growth in demand during

COVID-19 pandemic

Product

Investment to

ion

increase future production

Present

Prolonged inventory adjustment

(Temporary slowdown in market growth)

Continued low operating due to

overstocking

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Quarterly Financial Results

(B JPY)

Operating profit

Profit before tax

Profit attributable to owners of parent

Revenue

(B JPY)

120.0

600.0

Income

100.0

500.0

Revenue

80.0

400.0

60.0

300.0

40.0

200.0

20.0

100.0

0.0

0.0

FY22

FY23

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

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Quarterly Revenue, Order and Backlog

  • On a quarter on quarter basis, orders received slightly decreased. The revaluation of the backlog that was denominated in foreign currencies became an increasing factor due to the further depreciation of the yen, but orders received for high- frequency device and communications module and capacitors decreased due to the seasonality of smartphones.
  • The book-to-bill ratio improved to 1 or higher.

(B JPY)

Backlog

Revenue

Order

600.0

500.0

FY23 4Q Revenue

390.4 B JPY

FY23 4Q Order

410.5 B JPY

400.0

FY23 4Q Backlog

310.1 B JPY

300.0

200.0

100.0

0.0

FY21

FY22

FY23

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

Book-to-

1.26

1.13

1.03

0.96

1.09

0.98

0.91

0.78

0.90

0.98

0.95

0.95

1.05

Bill Ratio

  • Orders = Revenue + Backlogs at the Current Quarter - Backlogs at the Previous Quarter * Backlogs are calculated based on exchange rates as of the end of each quarter.
  • Exchange rate against the U.S. dollar: 141.82 yen at the end of December 2023, 151.40 yen at the end of March 2024

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Revenue by Operating segments (FY2023)

FY2022

(B JPY)

(%)

Capacitors

738.8

43.8

Inductors and EMI filters

175.3

10.4

High-Frequency Device and

453.6

26.9

Communications Module

Battery and Power supply

214.6

12.7

Functional Device

92.8

5.5

Others

11.7

0.7

Total

1,686.8

100.0

FY2023

(B JPY)

(%)

753.5

46.0

180.3

11.0

440.1

26.8

164.4

10.0

90.7

5.5

11.2

0.7

1,640.2

100.0

Y on Y Change

(B JPY)

(%)

+14.7

+2.0

+4.9

+2.8

(13.5)

(3.0)

(50.2)

(23.4)

(2.1)

(2.2)

(0.5)

(4.3)

(46.6)

(2.8)

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Revenue by Operating segments [FY2022 to FY2023]

Capacitors

MLCCs︓

+2.0%

Revenue increased for mobility and smartphones.

Inductors and

Inductors︓

EMI filters

Revenue increased for smartphones and mobility.

+2.8%

High-Frequency

High frequency modules, SAW Filters, Multilayer resin substrates︓

Device and

Revenue increased for smartphones.

Communications

Connectivity modules︓

Module

Revenue decreased for smartphones and PCs.

(3.0%)

Battery and Power

Lithium-Ion secondary batteries :

supply

Revenue decreased for power tools.

(23.4%)

Functional Device

(2.2%)

Sensors︓

Whereas revenue for mobility increased, for computers and smartphones decreased.

Timing devices :

Revenue decreased for computers and smartphones.

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Murata Manufacturing Co. Ltd. published this content on 26 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 April 2024 14:25:00 UTC.