Brother Industries : Consolidated Results for the 3rd Quarter of Fiscal Year ending March 31, 2023

This document is a summary translation of the Japanese language original version. In the event of any discrepancy, errors and/or omissions, the Japanese language version shall prevail.

February 7, 2023

Highlights of Consolidated Results for the Nine Months and the Third Quarter of Fiscal Year ending March 31, 2023

		Millions of yen (except for per share amounts)
	Nine months ended Dec. 31, 2021	Nine months ended Dec. 31, 2022	Change
Revenue	Y	534,974	Y	613,474	14.7	%
Business segment profit		72,921		51,970	-28.7	%
Operating profit		76,020		59,011	-22.4	%
Profit before income taxes		76,775		60,130	-21.7	%
Profit for the period		54,732		42,971	-21.5	%
Profit for the period attributable to owners of the parent company		54,252		42,976	-20.8	%
Comprehensive income for the period		66,022		53,221	-19.4	%
Basic earnings per share for the period (yen)		208.70		167.79
Diluted earnings per share for the period (yen)		208.07		167.29
Dividends per common share (yen)		30.00		34.00

(Note) Business segment profit is calculated by subtracting cost of sales and selling, general and administrative expenses from revenue.

		As of Mar. 31, 2022		As of Dec. 31, 2022
Total assets	Y	811,149	Y	843,201
Total equity		561,211		589,911
Equity attributable to owners of the parent company		561,146		589,857
Equity attributable to owners of the parent company ratio		69.2	%	70.0	%
Equity attributable to owners of the parent company per share (yen)		2,170.46		2,308.30

Highlights of Consolidated Forecast for Fiscal Year ending March 31, 2023

		Millions of yen (except for per share amounts)
				[Forecast]
	Year ended Mar. 31, 2022		Year ended Mar. 31, 2023	Change
Revenue	Y	710,938	Y	825,000	16.0 %
Business segment profit		84,552		65,000	-23.1 %
Operating profit		85,501		73,000	-14.6 %
Profit before income taxes		86,429		73,000	-15.5	%
Profit for the period		61,515		51,000	-17.1	%
Profit for the period attributable to owners of the parent company		61,030		51,000	-16.4	%
Basic earnings per share for the period (yen)		234.89		199.12
Dividends per common share (yen)		64.00		68.00

(Note) Business segment profit is calculated by subtracting cost of sales and selling, general and administrative expenses from revenue.

Notes:

1. The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS).
2. Amounts less than 1 million yen have been rounded down.
3. Operating results for the nine months ended Dec. 31, 2022 are based on the following currency exchange rates: Actual average rates for the nine months ended Dec. 31, 2022: US$=135.40 yen, EURO=140.42 yen Forecasts for the year ending Mar. 31, 2023 are based on the following currency exchange rates:
   Assumed average rates for the year ending Mar. 31, 2023: US$=135.13 yen, EURO=139.67 yen
4. Number of shares outstanding (including treasury stock): 262,220 thousands as of Mar. 31, 2022, 257,755 thousands as of Dec. 31, 2022
   Number of treasury stock outstanding: 3,683 thousands as of Mar. 31, 2022, 2,218 thousands as of Dec. 31, 2022 Number of weighted average shares:
   259,955 thousands during the three months ended Dec. 31, 2021, 256,131 thousands during the three months ended Dec. 31, 2022 (Note) The Company has introduced a Performance Share using a BIP trust for directors, and the Company's shares
   held by the trust (258,000 shares for the third quarter of the year ended Mar. 31, 2023) are included in treasury stock.
5. Impact of COVID-19
   Regarding the impact of COVID-19, it is difficult to predict when it will end and how it will affect future cash-flow, but economic activity is on a recovery trend due to measures such as vaccination. On the other hand, we do not know when the global semiconductor shortage will be resolved and the supply shortage is likely to continue. And also, there is a high possibility that sea freight will continue to rise due to port congestion and imbalance between supply and demand. Due to these reasons, the uncertainty over the Group's future business activities continues.
   The Group has made estimates and judgements involving estimations that the current situation will affect its consolidated financial performance for the year ending Mar. 31, 2023. The Group's consolidated financial statements for the year ending Mar. 31, 2023 and onwards may be significantly affected depending on the actual outcome.

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Consolidated Statement of Financial Position

		Millions of yen
		As of		As of
		Mar. 31,		Dec. 31,
		2022		2022
Assets
Current assets
Cash and cash equivalents	Y	167,915	Y	107,731
Trade and other receivables		102,685		124,683
Other financial assets		11,419		12,930
Inventories		169,583		222,829
Other current assets		24,843		34,529
Subtotal		476,447		502,703
Non-current assets classified as held for sale		297		-
Total current assets		476,745		502,703
Non-current assets
Property, plant and equipment		117,127		122,209
Right-of-use assets		21,136		24,437
Investment property		7,858		6,129
Goodwill and intangible assets		121,689		121,126
Investments accounted for using		1,862		1,976
the equity method
Other financial assets		33,389		29,445
Deferred tax assets		21,261		23,350
Other non-current assets		10,078		11,823
Total non-current assets		334,404		340,498
Total assets	Y	811,149	Y	843,201
Equity and liabilities
Liabilities
Current liabilities
Trade and other payables	Y	71,247	Y	75,153
Bonds and borrowings		20,121		42,563
Other financial liabilities		9,517		9,190
Income taxes payable		14,084		8,847
Provisions		3,211		4,138
Contract liabilities		7,807		6,807
Other current liabilities		53,516		53,078
Total current liabilities		179,506		199,779
Non-current liabilities
Bonds and borrowings		20,705		600
Other financial liabilities		20,379		22,941
Retirement benefits liabilities		16,366		17,143
Provisions		2,972		3,029
Deferred tax liabilities		7,207		6,739
Contract liabilities		1,600		1,905
Other non-current liabilities		1,197		1,150
Total non-current liabilities		70,431		53,509
Total liabilities		249,937		253,289
Equity
Capital stock		19,209		19,209
Capital surplus		17,866		17,805
Retained earnings		554,910		570,279
Treasury stock		(5,428)		(3,624)
Other components of equity		(25,411)		(13,811)
Equity attributable to owners of the		561,146		589,857
parent company
Non-controlling interests		65		53
Total equity		561,211		589,911
Total equity and liabilities	Y	811,149	Y	843,201

2

Consolidated Statement of Income

Millions of yen

	Nine months ended	Nine months ended
	Dec. 31,		Dec. 31,
		2021		2022
Revenue	Y	534,974	Y	613,474
Cost of sales		(300,388)		(373,351)
Gross profit		234,586		240,123
Selling, general and administrative expenses		(161,664)		(188,153)
Other income		5,328		9,238
Other expenses		(2,229)		(2,197)
Operating profit		76,020		59,011
Finance income		2,231		5,369
Finance expenses		(1,667)		(4,459)
Share of profit/(loss) of investments accounted for		190		209
using the equity method
Profit before income taxes		76,775		60,130
Income tax expenses		(22,043)		(17,159)
Profit for the period		54,732		42,971
Profit for the period attributable to:
Owners of the parent company		54,252		42,976
Non-controlling interests		480		(5)
Profit for the period	Y	54,732	Y	42,971

Earnings per share:		Yen		Yen
Basic earnings per share	Y	208.70	Y	167.79
Diluted earnings per share		208.07		167.29

3

Consolidated Statement of Income

Millions of yen

	Three months ended	Three months ended
	Dec. 31,		Dec. 31,
		2021		2022
Revenue	Y	184,457	Y	216,807
Cost of sales		(105,208)		(135,296)
Gross profit		79,249		81,511
Selling, general and administrative expenses		(55,728)		(65,462)
Other income		2,038		7,029
Other expenses		(716)		(1,534)
Operating profit		24,842		21,543
Finance income		1,103		1,900
Finance expenses		(832)		(1,614)
Share of profit/(loss) of investments accounted for		86		93
using the equity method
Profit before income taxes		25,199		21,922
Income tax expenses		(7,581)		(9,210)
Profit for the period		17,617		12,711
Profit for the period attributable to:
Owners of the parent company		17,440		12,718
Non-controlling interests		177		(6)
Profit for the period	Y	17,617	Y	12,711

Earnings per share:		Yen		Yen
Basic earnings per share	Y	67.09	Y	49.77
Diluted earnings per share		66.88		49.63

4

Consolidated Statement of Comprehensive Income

Millions of yen

	Nine months ended	Nine months ended
	Dec. 31,	Dec. 31,
		2021	2022
Profit for the period	Y	54,732	42,971

Other comprehensive income, net of income tax

Items that will not be reclassified subsequently to profit or loss

Gains/(Losses) on investments in equity instruments designated as FVTOCI

Total of items that will not be reclassified subsequently to profit or loss

Items that may be reclassified subsequently to profit or loss

Exchange differences on translating foreign operations

Total of items that may be reclassified subsequently to profit or loss

Other comprehensive income for the period, net of income tax

Comprehensive income for the period

Comprehensive income for the period attributable to:

(1,160)(1,349)

(1,160)(1,349)

12,450	11,600
12,450	11,600
11,290	10,250
66,022	53,221

Owners of the parent company		65,524	53,226
Non-controlling interests		498	(5)
Comprehensive income for the period	Y	66,022	53,221

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