Brother Industries : Highlights of Consolidated Results for Fiscal Year ended March 31, 2021

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.

May 7, 2021

Highlights of Consolidated Results for Fiscal Year ended March 31, 2021

Millions of yen (except for per share amounts)

			Year ended Mar 31, 2020			Year ended Mar 31, 2021		Change	%
Revenue		Y	637,259		Y	631,812		-0.9
Business segment profit			66,942			78,076	16.6	%
Operating profit			67,329			42,731	-36.5	%
Profit before income taxes			67,046			42,944	-36.0	%
Profit for the period			49,699			24,659	-50.4	%
Profit for the period attributable to owners of the parent company			49,566			24,520	-50.5	%
Comprehensive income for the period			19,826			69,474	250.4	%
Basic earnings per share for the period (yen)			190.80			94.36
Diluted earnings per share for the period (yen)			190.21			94.07
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.

			As of Mar. 31, 2020			As of Mar. 31, 2021
Total assets		Y	731,472		Y	743,896
Total equity			445,171			499,707
Equity attributable to owners of the parent company			428,520			483,050
Equity attributable to owners of the parent company ratio			58.6	%		64.9	%
Equity attributable to owners of the parent company per share (yen)			1,649.22			1,858.28
			Year ended Mar 31, 2020			Year ended Mar 31, 2021
Net cash provided by operating activities		Y	87,748		Y	109,265
Net cash provided by (used in) investing activities			(27,955)			(25,080)
Net cash provided by (used in) financing activities			(14,916)			(74,038)
Cash and cash equivalents at end of period			168,422			191,002

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	626,000		-0.9	%
Business segment profit			78,076			60,000		-23.2 %
Operating profit			42,731			60,000		40.4	%
Profit before income taxes			42,944			59,500		38.6	%
Profit for the period			24,659			42,500		72.3	%
Profit for the period attributable to owners of the parent company			24,520			42,500		73.3 %
Basic earnings per share for the period (yen)			94.36			163.54
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. Yen amounts for the year ended Mar 31, 2021 have been translated into U.S. dollars for convenience only, at a uniform rate of US$1=110.00 yen, in the accompanying consolidated financial statements.
4. Operating results for the year ended Mar 31, 2021 are based on the following currency exchange rates: Actual average rates for the year ended Mar 31, 2021: US$=106.17 yen, EURO=123.73 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$=103.00 yen, EURO=125.00 yen
5. Number of shares outstanding (including treasury stock): 262,220 thousands as of Mar. 31, 2020, 262,220 thousands as of Mar 31, 2021
   Number of treasury stock outstanding: 2,388 thousands as of Mar. 31, 2020, 2,276 thousands as of Mar. 31, 2021 Number of weighted average shares:
   259,781 thousands during the year ended March 31, 2020, 259,868 thousands during the year ended March 31, 2021
6. 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.
7. 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.

1

Consolidated Statement of Financial Position

				Millions of yen		Thousands of
						U.S. dollars
				As of			As of			As of
				Mar. 31,			Mar 31,			Mar 31,
				2020			2021			2021
Assets
Current assets		Y	168,422		Y	191,002	$	1,736,382
Cash and cash equivalents
Trade and other receivables			95,067			93,055			845,955
Other financial assets			11,277			8,391			76,282
Inventories			117,858			120,186			1,092,600
Other current assets			15,554			16,070			146,091
Subtotal			408,179			428,705			3,897,318
Non-current assets classified as held for sale			601			45			409
Total current assets			408,780			428,751			3,897,736
Non-current assets						107,742			979,473
Property, plant and equipment			104,204
Right-of-use assets			25,727			20,835			189,409
Investment property			8,122			8,248			74,982
Goodwill and intangible assets			134,409			118,196			1,074,509
Investments accounted for using			1,594			1,772			16,109
the equity method
					36,042			327,655
Other financial assets			27,871
Deferred tax assets			14,533			14,842			134,927
Other non-current assets			6,229			7,464			67,855
Total non-current assets			322,692			315,145			2,864,955
Total assets		Y	731,472		Y	743,896		$	6,762,691
Equity and liabilities
Liabilities
Current liabilities					Y	54,589	$	496,264
Trade and other payables		Y	51,041
Bonds and borrowings			50,361			19,167			174,245
Other financial liabilities			8,482			9,887			89,882
Income taxes payable			3,455			6,779			61,627
Provisions			3,349			4,015			36,500
Contract liabilities			4,413			5,636			51,236
Other current liabilities			48,813			51,412			467,382
Total current liabilities			169,918			151,489			1,377,173
Non-current liabilities						38,290			348,091
Bonds and borrowings			56,650
Other financial liabilities			28,540			23,295			211,773
Retirement benefits liabilities			20,261			19,316			175,600
Provisions			2,986			2,848			25,891
Deferred tax liabilities			5,564			6,394			58,127
Contract liabilities			1,189			1,506			13,691
Other non-current liabilities			1,188			1,047			9,518
Total non-current liabilities			116,382			92,700			842,727
Total liabilities			286,300			244,189			2,219,900
Equity						19,209			174,627
Capital stock			19,209
Capital surplus			17,632			17,652			160,473
Retained earnings			491,803			509,662			4,633,291
Treasury stock			(2,597)			(2,477)			(22,518)
Other components of equity			(97,526)			(60,998)			(554,527)
Equity attributable to owners of the			428,520			483,050			4,391,364
parent company
Non-controlling interests			16,650			16,657			151,427
Total equity			445,171			499,707			4,542,791
Total equity and liabilities		Y	731,472		Y	743,896		$	6,762,691

2

Consolidated Statement of Income

			Millions of yen			Thousands of U.S.
						dollars
		Year ended		Year ended			Year ended
			Mar 31,			Mar 31,			Mar 31,
			2020			2021			2021
Revenue	Y	637,259		Y	631,812	$	5,743,745
Cost of sales		(354,987)			(345,209)			(3,138,264)
Gross profit		282,272			286,602			2,605,473
Selling, general and administrative expenses		(215,330)			(208,526)			(1,895,691)
Other income		3,264			6,107			55,518
Other expenses		(2,876)			(41,451)			(376,827)
Operating profit		67,329			42,731			388,464
Finance income		2,289			2,209			20,082
Finance expenses		(2,700)			(2,231)			(20,282)
Share of profit/(loss) of investments accounted for using		128			235			2,136
the equity method
Profit before income taxes		67,046			42,944			390,400
Income tax expenses		(17,347)			(18,285)			(166,227)
Profit for the period		49,699			24,659			224,173
Profit for the period attributable to:
Owners of the parent company		49,566			24,520			222,909
Non-controlling interests		132			138			1,255
Profit for the period	Y	49,699		Y	24,659	$	224,173
Earnings per share:		Yen			Yen			U.S. dollars
Basic earnings per share	Y	190.80		Y	94.36	$	0.86
Diluted earnings per share		190.21			94.07			0.86

3

Consolidated Statement of Comprehensive Income

Profit for the period

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

Remeasurement of net defined benefit liability (asset)

Share of other comprehensive income of investments accounted for using the equity method

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:

Owners of the parent company

Non-controlling interests

Comprehensive income for the period

	Millions of yen			Thousands of U.S.
				dollars
Year ended		Year ended			Year ended
	Mar 31,			Mar 31,			Mar 31,
	2020			2021			2021
Y	49,699		Y	24,659		$	224,173

(1,948)	6,128	55,709
(1,933)	2,128	19,345
(17)	(7)	(64)
(3,899)		8,248		74,982

(25,973)	36,565	332,409
(25,973)		36,565		332,409
(29,873)		44,814		407,400
19,826	69,474	631,582

	19,729			69,219			629,264
	96			255			2,318
Y	19,826		Y	69,474	$	631,582

4

Consolidated Statement of Changes in Equity

Year ended Mar 31, 2020							Millions of yen
				Equity attributable to owners of the parent company
							Other components of equity
					Exchange		Gains/(Losses)
						on investments in	Remeasument of
	Capital	Capital	Retained	Treasury	differences on			Total	Non-	Total equity
	translating		equity	net defined	Total	controlling
	stock	surplus	earnings	stock		instruments	benefit liability
	foreign				interests
						designated as	(asset)
					operations
						FVTOCI
Balance as of Mar. 31, 2019	19,209	17,577	462,244	(2,694)	(71,577)		-	-	(71,577)	424,759	16,833	441,593
Cumulative effect of adoption of the new	-	-	(494)	-	-		-	-	-	(494)	(8)	(503)
accounting standards
Balance as of Apr. 1, 2019	19,209	17,577	461,749	(2,694)	(71,577)		-	-	(71,577)	424,264	16,825	441,090
Profit for the period	-	-	49,566	-	-		-	-	-	49,566	132	49,699
Other comprehensive income	-	-	-	-	(25,949)		(1,927)	(1,959)	(29,836)	(29,836)	(36)	(29,873)
Total comprehensive income	-	-	49,566	-	(25,949)		(1,927)	(1,959)	(29,836)	19,729	96	19,826
for the period
Acquisition of treasury stock	-	-	-	(10)	-		-	-	-	(10)	-	(10)
Disposal of treasury stock	-	(76)	(18)	107	-		-	-	-	12	-	12
Dividends paid	-	-	(15,607)	-	-		-	-	-	(15,607)	(270)	(15,877)
Share-based payment transaction	-	131	-	-	-		-	-	-	131	-	131
Reclassification to retained earnings	-	-	(3,887)	-	-		1,927	1,959	3,887	-	-	-
Total transactions with owners	-	54	(19,513)	97	-		1,927	1,959	3,887	(15,474)	(270)	(15,744)
Balance as of Mar 31, 2020	19,209	17,632	491,803	(2,597)	(97,526)		-	-	(97,526)	428,520	16,650	445,171
Year ended Mar 31, 2021							Millions of yen
				Equity attributable to owners of the parent company
							Other components of equity
					Exchange		Gains/(Losses)
						on investments in	Remeasument of			Non-
	Capital	Capital	Retained	Treasury	differences on			Total	Total equity
	translating		equity	net defined	Total	controlling
	stock	surplus	earnings	stock		instruments	benefit liability
	foreign				interests
						designated as	(asset)
					operations
						FVTOCI
Balance as of Apr. 1, 2020	19,209	17,632	491,803	(2,597)	(97,526)		-	-	(97,526)	428,520	16,650	445,171
Profit for the period	-	-	24,520	-	-		-	-	-	24,520	138	24,659
Other comprehensive income	-	-	-	-	36,528		6,057	2,112	44,698	44,698	116	44,814
Total comprehensive income	-	-	24,520	-	36,528		6,057	2,112	44,698	69,219	255	69,474
for the period
Acquisition of treasury stock	-	-	-	(17)	-		-	-	-	(17)	-	(17)
Disposal of treasury stock	-	(100)	-	137	-		-	-	-	37	-	37
Dividends paid	-	-	(14,830)	-	-		-	-	-	(14,830)	(248)	(15,079)
Share-based payment transaction	-	120	-	-	-		-	-	-	120	-	120
Reclassification to retained earnings	-	-	8,170	-	-		(6,057)	(2,112)	(8,170)	-	-	-
Total transactions with owners	-	20	(6,660)	120	-		(6,057)	(2,112)	(8,170)	(14,689)	(248)	(14,938)
Balance as of Mar 31, 2021	19,209	17,652	509,662	(2,477)	(60,998)		-	-	(60,998)	483,050	16,657	499,707
Year ended Mar 31, 2021						Thousands of U.S. dollars
				Equity attributable to owners of the parent company
							Other components of equity
							Gains/(Losses)
					Exchange		on investments in	Remeasument of			Non-
	Capital	Capital	Retained		differences on		equity	net defined		Total	Total equity
	Treasury stock		Total	controlling
	stock	surplus	earnings	translating foreign	instruments	benefit liability
					operations		designated as	(asset)			interests
							FVTOCI
Balance as of Apr. 1, 2020	174,627	160,291	4,470,936	(23,609)	(886,600)		-	-		3,895,636	151,364	4,047,009
Profit for the period	-	-	222,909	-	-		-	-		222,909	1,255	224,173
Other comprehensive income	-	-	-	-	332,073		55,064	19,200		406,345	1,055	407,400
Total comprehensive income	-	-	222,909	-	332,073		55,064	19,200		629,264	2,318	631,582
for the period
Acquisition of treasury stock	-	-	-	(155)	-		-	-		(155)	-	(155)
Disposal of treasury stock	-	(909)	-	1,245	-		-	-		336	-	336
Dividends paid	-	-	(134,818)	-	-		-	-		(134,818)	(2,255)	(137,082)
Share-based payment transaction	-	1,091	-	-	-		-	-		1,091	-	1,091
Reclassification to retained earnings	-	-	74,273	-	-		(55,064)	(19,200)		-	-	-
Total transactions with owners	-	182	(60,545)	1,091	-		(55,064)	(19,200)		(133,536)	(2,255)	(135,800)
Balance as of Mar 31, 2021	174,627	160,473	4,633,291	(22,518)	(554,527)		-	-		4,391,364	151,427	4,542,791

5