Fuji Seal International : Flash Report for the Third Quarter Period Ended December 31, 2022 (based on Japan GAAP) (on a consolidated basis)

Flash Report for the Third Quarter Period Ended December 31, 2022

(based on Japan GAAP) (on a consolidated basis)

											February 9, 2023
Name of the listed company: Fuji Seal International, Inc.
Code No.: 7864 Stock exchange: Tokyo
URL: http://www.fujiseal.com
Representative: Masayuki Shirokawa, President and COO
Contact: Shojiro Ueda, IR Manager	TEL [phone]
Scheduled date for submission of Quarterly Report: February 10, 2023
Date for initiation of dividend payments (subject to change): －
Prepared supplementary presentation material on quarterly results: Yes
Held quarterly results briefing: None
					* All amounts are rounded down to the nearest million yen.
1. Results for the Third Quarter Period (April 1 to December 31, 2022)
(1) Operating results												(¥ million)
											Net income
	Net sales	Operating income	Ordinary income	attributable to
											owners of the parent
3rd quarter ended December 31, 2022	¥136,141	6.8%	¥6,196	(34.9)%	¥6,063	(37.4)%	¥3,394	(37.6)%
3rd quarter ended December 31, 2021	127,517	5.3	9,512	(0.9)	9,682	6.7		5,442	(12.5)
Note: Comprehensive income
3rd quarter ended December 31, 2022: ¥14,101 million [122.2%]
3rd quarter ended December 31, 2021: ¥6,347 million [17.0%]
	Earnings per share (¥)		Diluted EPS (¥)
3rd quarter ended December 31, 2022		¥61.99			-
3rd quarter ended December 31, 2021		99.36			-
(2) Financial position												(¥ million)
Total assets		Net assets		Equity ratio			Net assets per share (¥)
As of December 31, 2022	¥183,461	¥121,707		66.3%					¥2,222.11
As of March 31, 2022	164,646	109,492		66.5					1,999.85
Note: Owners' equity
As of December 31, 2022: ¥121,707 million
As of March 31, 2022: ¥109,492 million
2. Dividends
					Cash dividends per share (¥)
				Quarter-end				Year-end	Annual
			1st		2nd	3rd
Year ended March 31, 2022			¥-		¥17.00	¥-	¥18.00	¥35.00
Year ending March 31, 2023			-		¥17.00
Year ending March 31, 2023 (forecast)						-	18.00	35.00

Note: Revisions to dividend payment forecasts during the reporting quarter: Not applicable

3. Business Performance Forecasts for the Year Ending March 31, 2023

(April 1, 2022 to March 31, 2023)

(¥ million)

				Net income	Earnings
	Net sales	Operating income	Ordinary income	attributable to
	per share (¥)
				owners of the parent
Full term	¥182,000 6.9%	¥7,700 (27.2)%	¥7,600 (28.3)%	¥4,100 (33.0)%	¥74.87

Note: Revisions to performance forecasts during the reporting quarter: Yes

For details on the revision of consolidated business performance forecasts, please refer to "Notice of Revisions to FY2022 Earnings Forecasts" announced today (February 9, 2023).

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1. 4. Others

2. Changes in the scope of consolidation

Inclusion: None

Exclusion: None

1. Significant methods applied for accounting: Not applicable
2. Changes in significant accounting policies

Changes in accounting policies resulting from revision to accounting standards: Not applicable

Changes to accounting policies other than revisions from the above: Yes

Changes in accounting assessments: Yes

Accounting restatements: Not applicable

Note: For details, please refer to page 13 "2. Consolidated financial statements and notes (4) Notes for quarterly consolidated financial statements, Changes in Accounting Policies."

(4) Number of ordinary shares issued at the end of the period
As of December 31, 2022:	60,161,956 shares	As of March 31, 2022:	60,161,956 shares
Number of shares in treasury at the end of the period
As of December 31, 2022:	5,390,936 shares	As of March 31, 2022:	5,411,891 shares

Average number of shares during the period

3rd quarter ended December 31, 2022: 54,762,684 shares 3rd quarter ended December 31, 2021: 54,769,031 shares

• Flash Reports (quarterly financial reports) are not audited by certified public accountants or auditing companies.
• The above forecasts are based on data available as of the date of release of this document as well as assumptions based on uncertain factors, which might have a material effect on the Company's performance in the future.
  Please refer to page 6 "(3) Information regarding business performance forecasts" under "1. Qualitative information for the third quarter ended December 31, 2022 (consolidated basis)" for details.

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1. Qualitative information for the third quarter ended December 31, 2022 (consolidated basis)

(1) Qualitative information regarding consolidated operating results

For the 3rd quarter of fiscal 2022 (ending March 31, 2023), net sales at Fuji Seal International, Inc. came to ¥136,141 million (up 6.8% year on year), operating income was ¥6,196 million (down 34.9%), and ordinary income totaled ¥6,063 million (down 37.4%). Net income attributable to owners of the parent was ¥3,394 million (down 37.6%).

			(¥ million)
	3rd quarter ended	3rd quarter ended	Change
	December 31, 2021	December 31, 2022
Net sales	127,517	136,141	6.8%
Operating income	9,512	6,196	(34.9)%
Ordinary income	9,682	6,063	(37.4)%
Net income attributable to owners	5,442	3,394	(37.6)%
of the parent
Average exchange rate vs US	108.58	128.30	18.2 %
dollar (yen)
Average exchange rate vs euro	129.87	136.05	4.8%
(yen)

The following is a breakdown of business performance by segment.

											(¥ million)
			3rd quarter ended		3rd quarter ended		Change		Change in local
			December 31, 2021		December 31, 2022			currency terms
	Japan
	Shrink label	35,108		36,346		3.5%		-
	Self-adhesive label	7,329		7,012		(4.3) %		-
	Soft pouch	12,710		15,307		20.4%		-
	Machinery	3,988		3,881		(2.7) %		-
	Other	9,887		9,638		(2.5) %		-
	Total sales	69,025		72,186		4.6%		-
	Operating income	6,259		5,764		(7.9) %		-
	Americas
	Shrink label	25,359		31,113		22.7%	3.8%
	Self-adhesive label	876		1,385		58.0%	33.7%
	Soft pouch	401		249		(37.8) %	(47.4) %
	Machinery	3,762		3,286		(12.7) %	(26.1) %
	Other	990		833		(15.9) %	(28.8) %
	Total sales	31,390		36,868		17.5%	(0.6) %
	Operating income	2,994		1,809		(39.6) %	(48.8) %
	Europe
	Shrink label	10,079		11,424		13.3%	8.2%
	Self-adhesive label	4,977		4,103		(17.5)%	(21.3)%
	Soft pouch	114		139			21.6％	16.1%
	Machinery	5,725		5,108		(10.8)%	(14.8)%
	Total sales	20,896		20,776		(0.6)%	(5.1)%
	Operating income	110		(975)			－		－

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3rd quarter ended December 31, 2021

3rd quarter ended December 31, 2022

Change

Change in local currency terms

	ASEAN
	Shrink label	5,417	6,278	15.9%		(1.9)%
	Self-adhesive label	134	165	23.1%		4.1%
	Soft pouch	5,928	5,950	0.4%		(15.1)%
	Machinery	315	230	(27.0)%		(38.2)%
	Other	168	205	22.2%		3.4%
	Total sales	11,964	12,830	7.2%		(9.2)%
	Operating income	218	(57)	－	－

Japan

Sales of shrink labels increased 3.5% year on year to ¥36,346 million. Sales of self-adhesive labels declined 4.3% to ¥7,012 million. Sales of soft pouches increased 20.4% to ¥15,307 million. Machinery sales declined 2.7% to ¥3,881 million. Sales of other products declined 2.5% to ¥9,638 million.

As a result, total sales in Japan came to ¥72,186 million (up 4.6% year on year). On the earnings front, operating income declined 7.9% to ¥5,764 million.

Americas

Sales of shrink labels increased 22.7% (up 3.8% on a local currency basis) year on year to ¥31,113 million. Sales of self-adhesive labels increased 58.0% (up 33.7% on a local currency basis) to ¥1,385 million. Sales of soft pouches declined 37.8% (down 47.4% on a local currency basis) to ¥249 million. Machinery sales declined 12.7% (down 26.1% on a local currency basis) to ¥3,286million. Sales of other products declined 15.9% (down 28.8% on a local currency basis) to ¥833 million.

As a result, total sales in the Americas increased 17.5% (down 0.6% on a local currency basis) to ¥36,868 million. On the earnings front, operating income declined 39.6% (down 48.8% on a local currency basis) to ¥1,809 million.

Europe

Sales of shrink labels increased 13.3% (up 8.2% on a local currency basis) to ¥11,424 million. Sales of self-adhesive labels declined 17.5% (down 21.3% on a local currency basis) to ¥4,103 million. Sales of soft pouches increased 21.6% (up 16.1% on a local currency basis) to ¥139 million. Machinery sales declined 10.8% (down 14.8% on a local currency basis) to ¥5,108 million.

As a result, total sales in Europe declined 0.6% (down 5.1% on a local currency basis) to ¥20,776 million. On the earnings front, an operating loss of ¥975 million was recorded (compared to an operating income of ¥110 million in the corresponding period of the previous fiscal year).

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ASEAN

Sales of shrink labels increased 15.9% (down 1.9% on a local currency basis) to ¥6,278 million. Sales of self-adhesive labels increased 23.1% (up 4.1% on a local currency basis) to ¥165 million. Sales of soft pouches increased 0.4% (down 15.1% on a local currency basis) to ¥5,950 million. Machinery sales declined 27.0% (down 38.2% on a local currency basis) to ¥230 million. Sales of other products increased 22.2% (up 3.4% on a local currency basis) to ¥205 million.

As a result, total sales in ASEAN increased 7.2% (down 9.2% on a local currency basis) to ¥12,830 million. On the earnings front, an operating loss of ¥57 million was recorded (compared to an operating income of ¥218 million in the corresponding period of the previous fiscal year).

1. Qualitative information on financial condition Assets, Liabilities and Net Assets

At the end of the third quarter of fiscal 2022, total assets had increased ¥18,815 million compared with the previous fiscal year-end, to ¥183,461 million.

The main factors were a ¥8,600 million increase in notes and accounts receivable (including electronically recorded monetary claims), a ¥8,409 million increase in inventories, a ¥6,813 million increase in tangible fixed assets and a ¥5,606 million decrease in cash and deposits.

Total liabilities were up ¥6,600 million compared to the previous fiscal year-end to ¥61,754 million. This was mainly due to a ¥3,937 million increase in notes and accounts payable (including electronically recorded monetary obligations).

Total net assets were up ¥12,214 million compared to the previous fiscal year-end to ¥121,707 million. This mainly reflected a ¥1,478 million increase in retained earnings and ¥10,410 million increase in foreign currency translation adjustments.

Cash Flows

Net cash provided by operating activities for the third quarter ended December 31, 2022 was ¥2,925million (compared with net cash of ¥10,216 million provided in the corresponding period of the previous fiscal year). The main items increasing cash were the posting of income before income taxes of ¥5,483 million and depreciation and amortization of ¥5,765 million, along with a ¥2,946 million increase in notes and accounts payable, while the main items decreasing cash were a ¥5,062 million increase in notes and accounts receivable-trade, a ¥5,880 million increase in inventories, and ¥2,924 million in income taxes paid.

Net cash used in investing activities amounted to ¥8,309 million (compared with net cash of ¥7,931 million used in the corresponding period of the previous fiscal year). This was due primarily to ¥8,378 million in cash used for the purchase of tangible fixed assets.

Net cash used in financing activities was ¥5,163 million (compared with net cash of ¥6,833 million used in the corresponding period of the previous fiscal year). This was due mainly to a repayment of borrowings of ¥3,032 million, and cash dividends paid of ¥1,916 million.

As a result, cash and cash equivalents at the end of the third quarter of fiscal 2022 decreased ¥8,310 million from the previous fiscal year-end to ¥15,794 million.

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