Fanuc : Consolidated Quarterly Financial Results For the three months ended June 30, 2020

(TRANSLATION)

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. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation.

Consolidated Quarterly Financial Results

(based on Japanese standards)

For the three months ended June 30, 2020

		July 28, 2020
Company name: FANUC CORPORATION	Stock exchange listing: Tokyo Stock Exchange
Stock code:	6954	URL: https://www.fanuc.co.jp/eindex.html
Representative: (Title) President	(Name) Kenji Yamaguchi
Contact:	(Title) Manager, Public Relations	(Name) Keisuke Fujii TEL: [phone]

Scheduled date of filing quarterly report: August 6, 2020

Scheduled date of commencing of dividend payments: -

Availability of supplementary briefing material on quarterly financial results: Available

Schedule of quarterly financial results briefing session: Scheduled

1. Consolidated Financial Results for the Three Months Ended June 30, 2020 (April 1, 2020 - June 30, 2020)

(1) Consolidated Results of Operations

(% represents changes from the previous corresponding Three-month period.)

Three months	Net sales				Operating income			Ordinary income		Net income
						attributable to owners
ended June 30
																	of parent
	Millions of yen		%	Millions of yen			%			Millions of yen		%			Millions of yen		%
2020	109,260		(18.8)	11,078			(61.3)				13,140		(59.0)		9,091			(61.0)
2019	134,634		(26.4)	28,595			(47.5)				32,063		(47.2)		23,282			(47.9)
Note: Consolidated	comprehensive income: April-June 2020:		¥12,650 million (6.3)%
						April-June 2019: ¥13,503 million (69.0)%
Three months	Net income				Net income
			per share
ended June 30	per share
			(diluted)
2020	Yen				Yen
47.39			-
2019	120.75			-
(2) Consolidated Financial Position
	Total assets	Net assets			Equity ratio
	Millions of yen	Millions of yen			%
June 30, 2020	1,475,032	1,342,173						90.4
March 31, 2020	1,512,499	1,362,865						89.6	1,355,100 million
(Reference) Equity: June 30, 2020: ¥1,334,097 million		March 31, 2020: ¥
2. Dividends
						Dividends per share
	1st Quarter			2nd Quarter	3rd Quarter	Year-end	Full year
			Dividends
FY2019	Yen				Yen			Yen		Yen				Yen
-				125.35			-		174.65			300.00
FY2020	-
FY2020						-			-		-				-
(forecast)

Note: We have not changed the forecasts of dividends from the latest ones.

Note: The year-end dividends for the year ended March 31, 2020 consist of ordinary dividends of ¥103.79 and special dividends of ¥70.86.

Note: The forecasts of the 2nd quarter-end and year-end dividends for the year ending March 31, 2021, will be disclosed promptly upon their availability.

3. Consolidated Financial Forecasts for the Year Ending March 31, 2021 (April 1, 2020 - March 31, 2021)

(% for the 2Q cumulative period and for the full year represent changes from the same quarter of the previous

fiscal year and changes from the previous fiscal year.)

	Net sales	Operating income	Ordinary income	Net income	Net income
	attributable to
	per share
							owners of parent
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
2nd Quarter	212,400	(18.6)	20,400	(58.4)	25,900	(54.6)	18,700	(53.5)	97.48
(Cumulative)
Fiscal period	423,300	(16.7)	38,500 (56.4)	47,700 (53.6)	34,500	(53.0)	179.85
Note: We have	changed the forecasts	of financial results	from the latest ones.

Note: Actual results may differ from these forecasts, subject to various conditions, including how far the coronavirus (COVID-19) will further spread, and when the pandemic will end. We will promptly publish new information, which may greatly affect actual results if any, upon their availability.

*Notes

(1) Changes in Significant Subsidiaries during the period

(changes in specific subsidiaries that caused change in scope of consolidation) : No

(2) Adoption of Simplified and Specifically Applied Accounting Method for Quarterly
Consolidated Financial Reporting	:	No
(3) Changes in Accounting Principles and Accounting Estimates, and Revisions/Restatements
1.	Changes associated with changes in accounting standards	:	No
2.	Changes in accounting principles other than 1	:	No
3.	Changes in accounting estimates	:	No
4.	Revisions/restatements	:	No

(4) Number of shares outstanding (Common shares)
1. Number of shares outstanding at the end of the period (including treasury stocks)	204,031,841
June 30, 2020	201,922,097	March 31, 2020
	shares		shares
2. Number of treasury stocks	10,097,565	March 31, 2020	12,205,848
June 30, 2020
	shares		shares
3. Average number of shares during the period	April-June 2019	192,813,688
April-June 2020	191,825,011
	shares		shares

• The report of the quarterly financial results is not subject to audit by certified public accountant or audit firm.
• Any forward looking statements such as financial forecasts described in this report are subject to uncertain factors such as supply and demand trends, industry competition, economic conditions, and others in major markets. Actual results may differ from these forecasts. The forecasts of the 2nd quarter-end and the year-end dividends for the year ending March 31, 2021, will be disclosed promptly upon their availability.

Table of Contents of Accompanying Documents

1.	Results of Operations and Financial Position	2
	(1)	Results of Operations	2
	(2)	Financial Position	3
	(3)	Financial Results Forecasts	3
2.	Consolidated Quarterly Financial Statements	5
	(1)	Consolidated Quarterly Balance Sheet	5
	(2)	Consolidated Quarterly Statement of Income and
		Consolidated Quarterly Statement of Comprehensive Income	7
		Consolidated Quarterly Statement of Income	7
		Consolidated Quarterly Statement of Comprehensive Income	8
3.	Other Information	9
	(1)	Changes in Significant Subsidiaries during the period	9

1. Adoption of Simplified and Specifically Applied Accounting

Method for Quarterly Consolidated Financial Reporting

9

1. Changes in Accounting Principles and Accounting Estimates, and

	Revisions/Restatements	9
(4)	Note on Premise of a Going Concern	9
(5)	Note on the Substantial Change in Shareholders' Equity	9

1

1. Results of Operations and Financial Position

(1) Results of Operations

Regarding the circumstances surrounding the FANUC Group during the first quarter (from April 1 to June 30, 2020), the market conditions became even harsher, due to the spread of the coronavirus (COVID-19) amid the ongoing reduction in capital investment stemming from the impact of the trade friction between the United States and China and other factors. Under these circumstances, the FANUC Group has striven to maintain delivery of products and service activities for our customers while placing highest priority on preventing the spread of the coronavirus (COVID-19). In addition, to deal with the current strenuous market conditions, we have steadily fortified our corporate structure by reducing expenses, reviewing unnecessary and non-urgent capital investment, and streamlining business operations.

During the three months from April to June 2020, FANUC posted consolidated net sales totaling ¥109,260 million, down 18.8%, consolidated ordinary income totaling ¥13,140 million, down 59.0%, and net income attributable to owners of parent totaling ¥9,091 million, down 61.0%, compared with the corresponding period of the previous fiscal year.

An overview of the results for each business division is as follows:

In the FA Division, in the machine tool industry, the primary market for FANUC CNC systems, although demand recovered and remained solid in China, demands in Japan, South Korea and Taiwan remained sluggish. In addition, demand declined in Europe and India as well, where the impact of lockdowns was significant. With regard to our lasers, there was a slowdown in demand, and competition with overseas manufacturers is further intensifying. As a result, net sales in the FA Division totaled ¥34,848 million, down 19.9% compared with the corresponding period of the previous fiscal year.

In the Robot Division, although sales for the automobile industries in the Americas were slow, sales for the general industries were solid. Sales mainly for the IT-related industry in China remained favorable. However, sales remained sluggish in Japan and Europe. As a result, net sales in the Robot Division totaled ¥40,630 million, down 13.7% compared with the corresponding period of the previous fiscal year.

In the Robomachine Division, although demand for ROBODRILLs (compact machining centers) for the computer and tablet markets in China remained positive, sales declined due to decreased demand in other regions and markets. Although sales of ROBOSHOTs (electric injection molding machines) also decreased compared with the corresponding period of the previous fiscal year, we focused efforts on expanding sales mainly in the medical market. With regard to ROBOCUTs (wire-cut electric discharge machines), sales also declined. As a result, net sales in the Robomachine Division totaled ¥18,367 million, down 16.8% compared with the corresponding period of the previous fiscal year.

2

In the Service Division, lockdowns imposed by the coronavirus (COVID-19) in countries throughout the world, brought about closure of customers' factories, decrease in factories' operating rates among others, resulting in the decrease in requests for our services. As a result, net sales in the Service Division totaled ¥15,415 million, down 29.8% compared with the corresponding period of the previous fiscal year.

(2) Financial Position

Total assets were ¥1,475,032 million, down ¥37,467 million compared with the end of the previous fiscal year.

Total liabilities were ¥132,859 million, down ¥16,775 million compared with the end of the previous fiscal year.

Total net assets were ¥1,342,173 million, down ¥20,692 million compared with the end of the previous fiscal year.

We cancelled our treasury shares exceeding the 5% of the total number of issued shares (2,109,744 shares, ¥22,095 million) on May 29, 2020, based on the shareholder return policy that we announced on April 24, 2019. (This policy is written in the Consolidated Annual Financial Results for the Year ended March 31, 2019) (There was no effect on the amount of total net assets.)

(3) Financial Results Forecasts

Regarding the consolidated financial forecasts for the year ending March 31, 2021, since it has been difficult to reasonably estimate how far the coronavirus (COVID-19) will further spread and when the pandemic will end, only the forecast for the second quarter (cumulative) of the year ending March 31, 2021 was disclosed on April 24, 2020, and not the full-year forecast.

At this time, we have decided to revise the forecast for the consolidated financial results for the second quarter (cumulative) of the year ending March 31, 2021, and announce the forecast for the consolidated financial results for the full-year, based on calculations considering the foreseeable impact of the spread of the coronavirus (COVID-19) on the FANUC Group.

However actual results may differ from these forecasts, subject to various conditions, including how far the coronavirus (COVID-19) will further spread, and when the pandemic will end. We will promptly publish new information, which may greatly affect actual results if any, upon their availability.

3

For the first half of the fiscal year 2020 (April 1, 2020 through September 30, 2020)

(Millions of yen)

	Previous forecast		Comparison with
	(released on	New forecast
	Previous forecast (%)
	April 24, 2020)
Net sales	197,900	212,400	7.3
Operating income	18,900	20,400	7.9
Ordinary income	23,100	25,900	12.1
Net income	16,400	18,700	14.0
attributable to owners
of parent

For the fiscal year 2020 (April 1, 2020 through March 31, 2021)

(Millions of yen)

	Previous forecast	New forecast	Comparison with
	(released on
	Previous forecast (%)
	April 24, 2020)
Net sales	-	423,300	-
Operating income	-	38,500	-
Ordinary income	-	47,700	-
Net income	-	34,500	-
attributable to owners
of parent

Note: The currency rate applied to the period from July 1, 2020 to March 31, 2021 is averaged at 100 yen/US dollar and 115 yen/Euro.

4

2. Consolidated Quarterly Financial Statements

(1) Consolidated Quarterly Balance Sheet

		(Millions of yen)
	March 31, 2020	June 30, 2020
Assets
Current assets
Cash and bank deposits	405,861	373,075
Notes and accounts receivables, trade	85,266	84,621
Marketable securities	126,700	126,600
Finished goods	65,122	69,004
Work in progress	51,979	47,465
Raw materials and supplies	25,450	27,839
Other current assets	10,833	11,751
Allowance for doubtful accounts	(831)	(751)
Total current assets	770,380	739,604
Noncurrent assets
Property, plant and equipment
Buildings	310,060	316,269
Land	146,085	146,579
Other, net	140,991	130,061
Total property, plant and equipment	597,136	592,909
Intangible assets	10,219	9,893
Investments and other assets
Investment securities	83,337	84,170
Others	51,883	48,913
Allowance for doubtful accounts	(456)	(457)
Total investments and other assets	134,764	132,626
Total noncurrent assets	742,119	735,428
Total assets	1,512,499	1,475,032

5

			(Millions of yen)
		March 31, 2020	June 30, 2020
Liabilities
Current liabilities
	Notes and accounts payables, trade	26,974	25,529
	Accrued income taxes	9,270	4,809
	Warranty reserves	8,306	8,003
	Other current liabilities	56,413	45,668
	Total current liabilities	100,963	84,009
Long-term liabilities
	Net defined benefit liability	44,652	44,862
	Other long-term liabilities	4,019	3,988
	Total long-term liabilities	48,671	48,850
Total liabilities	149,634	132,859
Net assets
Shareholders' equity
	Common stock	69,014	69,014
	Capital surplus	96,265	96,265
	Retained earnings	1,351,122	1,304,963
	Treasury stock, at cost	(127,822)	(105,753)
	Total shareholders' equity	1,388,579	1,364,489
Accumulated other comprehensive income
	Valuation difference on available-for-sale	5,058	8,352
	securities
	Foreign currency translation adjustment	(26,608)	(27,256)
	Remeasurements of defined benefit plans	(11,929)	(11,488)
	Total accumulated other comprehensive	(33,479)	(30,392)
	income
Non-controlling interests	7,765	8,076
Total net assets	1,362,865	1,342,173
Total liabilities and net assets	1,512,499	1,475,032

6

(2) Consolidated Quarterly Statement of Income and
	Consolidated Quarterly Statement of Comprehensive Income
Consolidated Quarterly Statement of Income		(Millions of yen)
		Three months ended	Three months ended
		June 30, 2019	June 30, 2020
	Net sales	134,634	109,260
	Cost of goods sold	82,153	77,782
	Gross profit	52,481	31,478
	Selling, general and administrative expenses	23,886	20,400
	Operating income	28,595	11,078
	Non-operating income
	Interest income	1,067	729
	Dividends income	537	184
	Equity in earnings of affiliates	2,259	1,447
	Miscellaneous income	868	566
	Total non-operating income	4,731	2,926
	Non-operating expenses
	Removal expenses of noncurrent assets	363	138
	Donations	62	215
	Foreign exchange losses	747	448
	Miscellaneous expenses	91	63
	Total non-operating expenses	1,263	864
	Ordinary income	32,063	13,140
	Income before income taxes	32,063	13,140
	Income taxes-current	5,924	2,615
	Income taxes-deferred	2,532	1,002
	Total taxes and others	8,456	3,617
	Net income	23,607	9,523
	Net income attributable to non-controlling interests	325	432
	Net income attributable to owners of parent	23,282	9,091

7

Consolidated Quarterly Statement of Comprehensive Income

		(Millions of yen)
	Three months ended	Three months ended
	June 30, 2019	June 30, 2020
Net income	23,607	9,523
Other comprehensive income
Valuation difference on available-for-sale	345	3,294
securities

Foreign currency translation adjustment

Remeasurements of defined benefit plans

Share of other comprehensive income of affiliates accounted for using equity method

(11,892)1,142

772441

671(1,750)

Total other comprehensive income	(10,104)	3,127
Comprehensive income for the three months ended	13,503	12,650
June 30
Comprehensive income attributable to:
Owners of parent	13,540	12,177
Non-controlling interests	(37)	473

8

3. Other Information

1. Changes in Significant Subsidiaries during the period
   (changes in specific subsidiaries that caused change in scope of

	consolidation):	None
(2)	Adoption of Simplified and Specifically Applied Accounting Method
	for Quarterly Consolidated Financial Reporting:	None
(3)	Changes in Accounting Principles and Accounting Estimates, and
	Revisions/Restatements:	None
(4)	Note on Premise of a Going Concern:	None

1. Note on the Substantial Change in Shareholders' Equity:
   As resolved at the Board of Directors' meeting held on April 24, 2020, the Company cancelled 2,109,744 treasury shares on May 29, 2020. As a result, the Company's retained earnings and treasury stock each decreased by ¥22,095 million during the three months ended June 30, 2020.

9