Brother Industries : Highlights of Consolidated Results for the 3rd 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.

February 1, 2022

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

			Millions of yen (except for per share amounts)
		Nine months ended Dec. 31, 2020		Nine months ended Dec. 31, 2021	Change	%
Revenue		Y	467,486		Y	534,974		14.4
Business segment profit			63,337			72,921		15.1	%
Operating profit			62,840			76,020		21.0	%
Profit before income taxes			63,011			76,775		21.8	%
Profit for the period			47,609			54,732		15.0	%
Profit for the period attributable to owners of the parent company			47,526			54,252		14.2	%
Comprehensive income for the period			62,700			66,022		5.3	%
Basic earnings per share for the period (yen)			182.90			208.70
Diluted earnings per share for the period (yen)			182.33			208.07
Dividends per common share (yen)			27.00			30.00

(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 Dec. 31, 2021
Total assets		Y	743,896		Y	765,719
Total equity			499,707			533,881
Equity attributable to owners of the parent company			483,050			532,327
Equity attributable to owners of the parent company ratio			64.9	%		69.5	%
Equity attributable to owners of the parent company per share (yen)			1,858.28			2,047.76

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	700,000		10.8	%
Business segment profit			78,076			81,000		3.7	%
Operating profit			42,731			82,000		91.9	%
Profit before income taxes			42,944			82,500		92.1	%
Profit for the period			24,659			58,000		135.2	%
Profit for the period attributable to owners of the parent company			24,520			58,000		136.5 %
Basic earnings per share for the period (yen)			94.36			223.11
Dividends per common share (yen)			60.00			64.00

(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, 2021 are based on the following currency exchange rates: Actual average rates for the nine months ended Dec. 31, 2021: US$=111.38 yen, EURO=130.85 yen Forecasts for the year ending Mar. 31, 2022 are based on the following currency exchange rates:
   Assumed average rates for the year ending Mar. 31, 2022: US$=111.14 yen, EURO=129.92 yen
4. Number of shares outstanding (including treasury stock): 262,220 thousands as of Mar. 31, 2021, 262,220 thousands as of Dec. 31, 2021
   Number of treasury stock outstanding: 2,276 thousands as of Mar. 31, 2021, 2,264 thousands as of Dec. 31, 2021 Number of weighted average shares:
   259,852 thousands during the nine months ended Dec. 31, 2020, 259,955 thousands during the nine months ended Dec. 31, 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 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,			Dec. 31,
				2021			2021
Assets
Current assets				Y	160,202
Cash and cash equivalents	Y	191,002
Trade and other receivables		93,055			101,910
Other financial assets		8,391			8,807
Inventories		120,186			152,766
Other current assets		16,070			19,449
Subtotal		428,705			443,136
Non-current assets classified as held for sale		45			-
Total current assets		428,751			443,136
Non-current assets					111,671
Property, plant and equipment		107,742
Right-of-use assets		20,835			19,074
Investment property		8,248			7,941
Goodwill and intangible assets		118,196			118,263
Investments accounted for using		1,772			1,865
the equity method
				37,043
Other financial assets		36,042
Deferred tax assets		14,842			18,874
Other non-current assets		7,464			7,849
Total non-current assets		315,145			322,583
Total assets	Y	743,896		Y	765,719
Equity and liabilities
Liabilities
Current liabilities				Y	63,985
Trade and other payables	Y	54,589
Bonds and borrowings		19,167			19,402
Other financial liabilities		9,887			8,508
Income taxes payable		6,779			12,567
Provisions		4,015			3,398
Contract liabilities		5,636			5,982
Other current liabilities		51,412			47,604
Total current liabilities		151,489			161,449
Non-current liabilities					19,988
Bonds and borrowings		38,290
Other financial liabilities		23,295			18,830
Retirement benefits liabilities		19,316			18,897
Provisions		2,848			2,907
Deferred tax liabilities		6,394			7,158
Contract liabilities		1,506			1,525
Other non-current liabilities		1,047			1,080
Total non-current liabilities		92,700			70,388
Total liabilities		244,189			231,838
Equity					19,209
Capital stock		19,209
Capital surplus		17,652			17,779
Retained earnings		509,662			546,371
Treasury stock		(2,477)			(2,452)
Other components of equity		(60,998)			(48,580)
Equity attributable to owners of the		483,050			532,327
parent company
				1,554
Non-controlling interests		16,657
Total equity		499,707			533,881
Total equity and liabilities	Y	743,896		Y	765,719

2

Consolidated Statement of Income

Millions of yen

		Nine months ended		Nine months ended
			Dec. 31,			Dec. 31,
			2020			2021
Revenue		Y	467,486		Y	534,974
Cost of sales			(254,578)			(300,388)
Gross profit			212,907			234,586
Selling, general and administrative expenses			(149,569)			(161,664)
Other income			4,579			5,328
Other expenses			(5,076)			(2,229)
Operating profit			62,840			76,020
Finance income			2,379			2,231
Finance expenses			(2,398)			(1,667)
Share of profit/(loss) of investments accounted for using			190			190
the equity method
Profit before income taxes			63,011			76,775
Income tax expenses			(15,402)			(22,043)
Profit for the period			47,609			54,732
Profit for the period attributable to:
Owners of the parent company			47,526			54,252
Non-controlling interests			82			480
Profit for the period		Y	47,609		Y	54,732

Earnings per share:		Yen			Yen
Basic earnings per share	Y	182.90		Y	208.70
Diluted earnings per share		182.33			208.07

3

Consolidated Statement of Income

Millions of yen

		Three months ended		Three months ended
			Dec. 31,			Dec. 31,
			2020			2021
Revenue		Y	177,423		Y	184,457
Cost of sales			(94,131)			(105,208)
Gross profit			83,291			79,249
Selling, general and administrative expenses			(51,939)			(55,728)
Other income			1,973			2,038
Other expenses			(3,003)			(716)
Operating profit			30,321			24,842
Finance income			995			1,103
Finance expenses			(1,007)			(832)
Share of profit/(loss) of investments accounted for using			58			86
the equity method
Profit before income taxes			30,368			25,199
Income tax expenses			(7,485)			(7,581)
Profit for the period			22,883			17,617
Profit for the period attributable to:
Owners of the parent company			22,829			17,440
Non-controlling interests			53			177
Profit for the period		Y	22,883		Y	17,617

Earnings per share:		Yen			Yen
Basic earnings per share	Y	87.85		Y	67.09
Diluted earnings per share		87.57			66.88

4

Consolidated Statement of Comprehensive Income

Millions of yen

		Nine months ended		Nine months ended
			Dec. 31,			Dec. 31,
			2020			2021
Profit for the period		Y	47,609		Y	54,732

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:

5,283(1,160)

5,283(1,160)

9,808	12,450
9,808		12,450
15,091		11,290
62,700	66,022

Owners of the parent company		62,512			65,524
Non-controlling interests		188			498
Comprehensive income for the period	Y	62,700		Y	66,022

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