Brother Industries : Highlights of Consolidated Results for the 1st Quarter of Fiscal Year ending March 31, 2022

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.

August 3, 2021

Highlights of Consolidated Results for the Three Months and the First Quarter of Fiscal Year ending March 31, 2022

			Millions of yen (except for per share amounts)
		Three months ended Jun. 30, 2020	Three months ended Jun. 30, 2021	Change
Revenue		Y	133,186	Y	174,013		30.7	%
Business segment profit			8,622		26,168		203.5	%
Operating profit			9,263		26,461		185.7	%
Profit before income taxes			9,461		26,734		182.6	%
Profit for the period			6,630		18,771		183.1	%
Profit for the period attributable to owners of the parent company			6,617		18,618		181.3	%
Comprehensive income for the period			8,978		21,106		135.1	%
Basic earnings per share for the period (yen)			25.47		71.62
Diluted earnings per share for the period (yen)			25.39		71.42

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

			As of Mar. 31, 2021			As of Jun. 30, 2021
Total assets		Y	743,896		Y	759,230
Total equity			499,707			512,125
Equity attributable to owners of the parent company			483,050			495,422
Equity attributable to owners of the parent company ratio			64.9	%		65.3	%
Equity attributable to owners of the parent company per share (yen)			1,858.28			1,905.80

Highlights of Consolidated Forecast for Fiscal Year ending March 31, 2022

			Millions of yen (except for per share amounts)
						[Forecast]
		Year ended Mar. 31, 2021		Year ended Mar. 31, 2022	Change
Revenue		Y	631,812		Y	695,000		10.0	%
Business segment profit			78,076			68,000		-12.9 %
Operating profit			42,731			67,500		58.0	%
Profit before income taxes			42,944			67,500		57.2	%
Profit for the period			24,659			46,000		86.5	%
Profit for the period attributable to owners of the parent company			24,520			46,000		87.6 %
Basic earnings per share for the period (yen)			94.36			176.95
Dividends per common share (yen)			60.00			60.00

(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 three months ended Jun. 30, 2021 are based on the following currency exchange rates: Actual average rates for the three months ended Jun. 30, 2021: US$=110.00 yen, EURO=131.78 yen Forecasts for the year ending Mar. 31, 2022 are based on the following currency exchange rates:
   Assumed average rates for the year ending Mar. 31, 2022: US$=108.81 yen, EURO=127.59 yen
4. Number of shares outstanding (including treasury stock): 262,220 thousands as of Mar. 31, 2021, 262,220 thousands as of Jun. 30, 2021
   Number of treasury stock outstanding: 2,276 thousands as of Mar. 31, 2021, 2,265 thousands as of June. 30, 2021 Number of weighted average shares:
   259,848 thousands during the three months ended June 30, 2020, 259,951 thousands during the three months ended June 30, 2021
5. Changes in Accounting Policies: Amendment to IFRS 16 Leases
   The Brother Group early applied the practical expedient in paragraph 46A from the first quarter of the year ending March 31,2021. Furthermore, with the renewal of Section 46B (b), the Brother Group early applied the renewed standards from the first quarter of the year ending March 31,2022.
6. Impact of COVID-19
   Regarding the impact of COVID-19, it is impossible to predict when it will end and how it will affect future cash-flow. Although the global
   GDP forecast is on a recovery trend, the degree of recovery will vary depending on the country/region. Due to these diffrences and other 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, 2022. The Group's consolidated financial statements for the year ending Mar. 31, 2022 and onwards (particularly, impairment losses of property, plant and equipment, right-of-use assets, intangible assets, including goodwill, and investment property) 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,			Jun. 30,
				2021			2021
Assets
Current assets				Y	193,805
Cash and cash equivalents	Y	191,002
Trade and other receivables		93,055			95,889
Other financial assets		8,391			7,888
Inventories		120,186			129,768
Other current assets		16,070			16,156
Subtotal		428,705			443,508
Non-current assets classified as held for sale		45			-
Total current assets		428,751			443,508
Non-current assets					107,531
Property, plant and equipment		107,742
Right-of-use assets		20,835			20,823
Investment property		8,248			8,148
Goodwill and intangible assets		118,196			117,649
Investments accounted for using		1,772			1,769
the equity method
				35,772
Other financial assets		36,042
Deferred tax assets		14,842			16,194
Other non-current assets		7,464			7,831
Total non-current assets		315,145			315,721
Total assets	Y	743,896		Y	759,230
Equity and liabilities
Liabilities
Current liabilities				Y	61,149
Trade and other payables	Y	54,589
Bonds and borrowings		19,167			18,971
Other financial liabilities		9,887			10,275
Income taxes payable		6,779			7,942
Provisions		4,015			3,841
Contract liabilities		5,636			5,401
Other current liabilities		51,412			46,581
Total current liabilities		151,489			154,163
Non-current liabilities					38,497
Bonds and borrowings		38,290
Other financial liabilities		23,295			22,002
Retirement benefits liabilities		19,316			19,479
Provisions		2,848			2,925
Deferred tax liabilities		6,394			7,673
Contract liabilities		1,506			1,304
Other non-current liabilities		1,047			1,058
Total non-current liabilities		92,700			92,941
Total liabilities		244,189			247,105
Equity					19,209
Capital stock		19,209
Capital surplus		17,652			17,636
Retained earnings		509,662			518,949
Treasury stock		(2,477)			(2,448)
Other components of equity		(60,998)			(57,925)
Equity attributable to owners of the		483,050			495,422
parent company
				16,702
Non-controlling interests		16,657
Total equity		499,707			512,125
Total equity and liabilities	Y	743,896		Y	759,230

2

Consolidated Statement of Income

Millions of yen

		Three months ended		Three months ended
			Jun. 30,			Jun. 30,
			2020			2021
Revenue		Y	133,186		Y	174,013
Cost of sales			(77,048)			(96,256)
Gross profit			56,138			77,756
Selling, general and administrative expenses			(47,516)			(51,587)
Other income			1,211			969
Other expenses			(570)			(677)
Operating profit			9,263			26,461
Finance income			621			455
Finance expenses			(471)			(244)
Share of profit/(loss) of investments accounted for using			48			62
the equity method
Profit before income taxes			9,461			26,734
Income tax expenses			(2,831)			(7,963)
Profit for the period			6,630			18,771
Profit for the period attributable to:
Owners of the parent company			6,617			18,618
Non-controlling interests			12			152
Profit for the period		Y	6,630		Y	18,771

Earnings per share:		Yen			Yen
Basic earnings per share	Y	25.47		Y	71.62
Diluted earnings per share		25.39			71.42

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Consolidated Statement of Comprehensive Income

Millions of yen

		Three months ended		Three months ended
			Jun. 30,			Jun. 30,
			2020			2021
Profit for the period		Y	6,630		Y	18,771

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:

1,405(745)

1,405(745)

941	3,080
941		3,080
2,347		2,334
8,978	21,106

Owners of the parent company		8,939			20,948
Non-controlling interests		38			157
Comprehensive income for the period	Y	8,978		Y	21,106

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Consolidated Statement of Changes in Equity

Three months ended Jun. 30, 2020

		Equity attributable to owners of the parent company
					Other components
					of equity
	Capital stock	Capital surplus	Retained earnings	Treasury stock	Exchange differences
					on translating foreign
					operations
Balance as of Apr. 1, 2020	19,209	17,632	491,803	(2,597)	(97,526)
Profit for the period	-	-	6,617	-	-
Other comprehensive income	-	-	-	-	943
Total comprehensive income	-	-	6,617	-	943
for the period
Acquisition of treasury stock	-	-	-	(1)	-
Disposal of treasury stock	-	(20)	(8)	29	-
Dividends paid	-	-	(7,805)	-	-
Reclassification to retained	-	-	1,378	-	-
earnings
Total transactions with owners	-	(20)	(6,435)	27	-
Balance as of Jun. 30, 2020	19,209	17,611	491,985	(2,569)	(96,583)
	Equity attributable to owners of the parent company
	Other components of equity
	Gains/(Losses) on		Total	Non-controlling interests	Total equity
	investments in equity	Total
	instruments designated
	as FVTOCI
Balance as of Apr. 1, 2020	-	(97,526)	428,520	16,650	445,171
Profit for the period	-	-	6,617	12	6,630
Other comprehensive income	1,378	2,322	2,322	25	2,347
Total comprehensive income	1,378	2,322	8,939	38	8,978
for the period
Acquisition of treasury stock	-	-	(1)	-	(1)
Disposal of treasury stock	-	-	0	-	0
Dividends paid	-	-	(7,805)	(134)	(7,939)
Reclassification to retained	(1,378)	(1,378)	-	-	-
earnings
Total transactions with owners	(1,378)	(1,378)	(7,806)	(134)	(7,940)
Balance as of Jun. 30, 2020	-	(96,583)	429,653	16,555	446,208
Three months ended Jun. 30, 2021
		Equity attributable to owners of the parent company
					Other components
					of equity
	Capital stock	Capital surplus	Retained earnings	Treasury stock	Exchange differences
					on translating foreign
					operations
Balance as of Apr. 1, 2021	19,209	17,652	509,662	(2,477)	(60,998)
Profit for the period	-	-	18,618	-	-
Other comprehensive income	-	-	-	-	3,073
Total comprehensive income	-	-	18,618	-	3,073
for the period
Acquisition of treasury stock	-	-	-	(2)	-
Disposal of treasury stock	-	(16)	-	32	-
Dividends paid	-	-	(8,589)	-	-
Reclassification to retained	-	-	(743)	-	-
earnings
Total transactions with owners	-	(16)	(9,332)	29	-
Balance as of Jun. 30, 2021	19,209	17,636	518,949	(2,448)	(57,925)
	Equity attributable to owners of the parent company
	Other components of equity
	Gains/(Losses) on		Total	Non-controlling interests	Total equity
	investments in equity	Total
	instruments designated
	as FVTOCI
Balance as of Apr. 1, 2021	-	(60,998)	483,050	16,657	499,707
Profit for the period	-	-	18,618	152	18,771
Other comprehensive income	(743)	2,330	2,330	4	2,334
Total comprehensive income	(743)	2,330	20,948	157	21,106
for the period
Acquisition of treasury stock	-	-	(2)	-	(2)
Disposal of treasury stock	-	-	15	-	15
Dividends paid	-	-	(8,589)	(112)	(8,701)
Reclassification to retained	743	743	-	-	-
earnings
Total transactions with owners	743	743	(8,576)	(112)	(8,688)
Balance as of Jun. 30, 2021	-	(57,925)	495,422	16,702	512,125

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