Brother Industries : Highlights of Consolidated Results for the First Half and the Second 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.

November 9, 2022

Highlights of Consolidated Results for the First Half and the Second Quarter of Fiscal Year ending March 31, 2023

		Millions of yen (except for per share amounts)
	Six months ended Sept. 30, 2021	Six months ended Sept. 30, 2022	Change
Revenue	Y	350,517	Y	396,666	13.2	%
Business segment profit		49,401		35,921	-27.3	%
Operating profit		51,178		37,467	-26.8	%
Profit before income taxes		51,576		38,208	-25.9	%
Profit for the period		37,114		30,259	-18.5	%
Profit for the period attributable to owners of the parent company		36,812		30,258	-17.8	%
Comprehensive income for the period		37,736		66,219	75.5	%
Basic earnings per share for the period (yen)		141.61		118.00
Diluted earnings per share for the period (yen)		141.19		117.64
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 Sept. 30, 2022
Total assets	Y	811,149	Y	877,610
Total equity		561,211		611,621
Equity attributable to owners of the parent company		561,146		611,559
Equity attributable to owners of the parent company ratio		69.2	%	69.7	%
Equity attributable to owners of the parent company per share (yen)		2,170.46		2,393.28

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	840,000	18.2 %
Business segment profit		84,552		70,000	-17.2 %
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		198.88
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 six months ended Sept. 30, 2022 are based on the following currency exchange rates: Actual average rates for the six months ended Sept. 30, 2022: US$=133.46 yen, EURO=138.79 yen Forecasts for the year ending Mar. 31, 2023 are based on the following currency exchange rates:
   Assumed average rates for the year ending Mar. 31, 2023: US$=134.92 yen, EURO=137.61 yen
4. Number of shares outstanding (including treasury stock): 262,220 thousands as of Mar. 31, 2022, 257,755 thousands as of Sept. 30, 2022
   Number of treasury stock outstanding: 3,683 thousands as of Mar. 31, 2022, 2,224 thousands as of Sept. 30, 2022 Number of weighted average shares:
   259,954 thousands during the three months ended Sept. 30, 2021, 256,431 thousands during the three months ended Sept. 30, 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 second 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,		Sept. 30,
		2022		2022
Assets
Current assets
Cash and cash equivalents	Y	167,915	Y	129,754
Trade and other receivables		102,685		126,897
Other financial assets		11,419		14,756
Inventories		169,583		230,204
Other current assets		24,843		27,825
Subtotal		476,447		529,437
Non-current assets classified as held for sale		297		-
Total current assets		476,745		529,437
Non-current assets
Property, plant and equipment		117,127		124,019
Right-of-use assets		21,136		21,677
Investment property		7,858		7,471
Goodwill and intangible assets		121,689		123,451
Investments accounted for using		1,862		1,888
the equity method
Other financial assets		33,389		31,054
Deferred tax assets		21,261		27,217
Other non-current assets		10,078		11,392
Total non-current assets		334,404		348,172
Total assets	Y	811,149	Y	877,610
Equity and liabilities
Liabilities
Current liabilities
Trade and other payables	Y	71,247	Y	90,719
Bonds and borrowings		20,121		40,944
Other financial liabilities		9,517		9,392
Income taxes payable		14,084		6,630
Provisions		3,211		4,029
Contract liabilities		7,807		7,905
Other current liabilities		53,516		54,372
Total current liabilities		179,506		213,994
Non-current liabilities
Bonds and borrowings		20,705		600
Other financial liabilities		20,379		20,906
Retirement benefits liabilities		16,366		17,304
Provisions		2,972		3,076
Deferred tax liabilities		7,207		6,942
Contract liabilities		1,600		1,966
Other non-current liabilities		1,197		1,196
Total non-current liabilities		70,431		51,993
Total liabilities		249,937		265,988
Equity
Capital stock		19,209		19,209
Capital surplus		17,866		17,811
Retained earnings		554,910		566,640
Treasury stock		(5,428)		(3,637)
Other components of equity		(25,411)		11,534
Equity attributable to owners of the		561,146		611,559
parent company
Non-controlling interests		65		62
Total equity		561,211		611,621
Total equity and liabilities	Y	811,149	Y	877,610

2

Consolidated Statement of Income

Millions of yen

	Six months ended	Six months ended
	Sept. 30,		Sept. 30,
		2021		2022
Revenue	Y	350,517	Y	396,666
Cost of sales		(195,179)		(238,054)
Gross profit		155,337		158,612
Selling, general and administrative expenses		(105,936)		(122,691)
Other income		3,294		2,423
Other expenses		(1,517)		(877)
Operating profit		51,178		37,467
Finance income		1,127		5,732
Finance expenses		(834)		(5,108)
Share of profit/(loss) of investments accounted for		104		116
using the equity method
Profit before income taxes		51,576		38,208
Income tax expenses		(14,461)		(7,948)
Profit for the period		37,114		30,259
Profit for the period attributable to:
Owners of the parent company		36,812		30,258
Non-controlling interests		302		1
Profit for the period	Y	37,114	Y	30,259

Earnings per share:		Yen		Yen
Basic earnings per share	Y	141.61	Y	118.00
Diluted earnings per share		141.19		117.64

3

Consolidated Statement of Income

Millions of yen

	Three months ended	Three months ended
	Sept. 30,		Sept. 30,
		2021		2022
Revenue	Y	176,504	Y	196,931
Cost of sales		(98,923)		(122,428)
Gross profit		77,580		74,503
Selling, general and administrative expenses		(54,348)		(63,371)
Other income		2,601		1,507
Other expenses		(1,116)		(190)
Operating profit		24,717		12,449
Finance income		706		2,331
Finance expenses		(624)		(1,933)
Share of profit/(loss) of investments accounted for		42		62
using the equity method
Profit before income taxes		24,841		12,910
Income tax expenses		(6,497)		(44)
Profit for the period		18,343		12,866
Profit for the period attributable to:
Owners of the parent company		18,193		12,869
Non-controlling interests		149		(2)
Profit for the period	Y	18,343	Y	12,866

Earnings per share:		Yen		Yen
Basic earnings per share	Y	69.99	Y	50.34
Diluted earnings per share		69.77		50.19

4

Consolidated Statement of Comprehensive Income

Millions of yen

	Six months ended	Six months ended
	Sept. 30,	Sept. 30,
		2021	2022
Profit for the period	Y	37,114	30,259

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:

(600)(985)

(600)(985)

1,223	36,946
1,223	36,946
622	35,960
37,736	66,219

Owners of the parent company		37,370	66,218
Non-controlling interests		366	1
Comprehensive income for the period	Y	37,736	66,219

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