Ichikoh Industries : Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending December 31, 2023

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Consolidated Financial Results

for the Second Quarter of the Fiscal Year Ending December 31, 2023

August 7, 2023

ICHIKOH INDUSTRIES, LTD.

Tokyo Stock Exchange 7 2 4 4

http://www.ichikoh.com/

Christophe Vilatte, President, CEO, Representative director

Masaki Takamori, GM of Corporate Planning Department

TEL: [phone]

Filing of Quarterly Financial Report: August 10, 2023

Date for starting dividends payment: September 5, 2023

Quarterly earnings supplementary explanatory documents: Yes

Quarterly earnings presentation: Yes (Institutional Investor, Analyst)

*Amounts under one million yen have been rounded down.

1．Performance at the end of the Second Quarter as of June 30, 2023 (January 1, 2023 to June 30, 2023)

(1) Consolidated Financial Results			(Millions of yen; percentage figures indicate year-on-year change)
			Net Sales		Operating Income			Ordinary Income		quarterly net income (loss)
							attributable to the shareholder
																			parent company
					%				%						%				%
2nd Quarter (ended on Jun. 30, 2023)		75,770	20.4		3,777	236.9				3,783	134.4			2,521	99.1
2nd Quarter (ended on Jun. 30, 2022)		62,935	△ 3.8		1,121 △ 72.3				1,613	△ 65.5			1,266	△ 57.8
(Note)	Comprehensive income:
	Jun. 30, 2023	3,782 million yen	(		4.6%)	Jun. 30, 2022	3,615 million yen	( △15.7 %)
			Net income per		Net income per share-
			share (Yen)		diluted (Yen)
2nd Quarter (ended on Jun. 30, 2023)		26.23				-
2nd Quarter (ended on Jun. 30, 2022)		13.18				-
(2) Consolidated Financial Position			(Millions of yen; except for per share figures)
			Total Assets		Net Assets			Equity Ratio (%)
																%
2nd Quarter (as of Jun. 30, 2023)		125,133				58,378						46.1
FY2021 (as of Dec. 31, 2022)		125,915				55,007						43.2
[Reference] Equity: Second Quarter as of Jun. 30, 2023	57,645 million yen
	Fiscal Year as of Dec. 31, 2022		54,334 million yen
2. Cash Dividends
								Cash Dividends per share (Yen)
	(Cut-off Date)	1st Quarter		2nd Quarter		3rd Quarter		Year-End		Full Year
FY2022 (ended on Dec. 31, 2022)			-			4.50		-				4.50			9.00
FY2023 (ended on Dec. 31, 2023)			-			5.50
FY2023 (ended on Dec. 31, 2023) [plan]							-				5.50			11.00
Note: Revision to previous dividend forecast : No

3. Consolidated Performance Forecasts for the Fiscal Year 2023 (January 1, 2023 to December 31, 2023)

(Millions of yen; percentages indicate changes over the same period in the previous fiscal year)

	Net Sales		Operating Income	Ordinary Income	quarterly net income (loss)	Net Income
		attributable to the shareholder
		per Share (Yen)
							parent company
		%		%		%		%	yen
Full Year	143,500	5.9	6,400	62.5	7,200	34.5	5,300	19.8	55.14

Note: Revision to previous consolidated performance forecast : No

4. Other
(1) Principal affiliates' transfer in this fiscal term (in accordance with the change of consolidation scope)	No
Added	-	(Corporate name)
Excluded	-	(Corporate name)

1. Application of simple accounting as well as specific accounting for preparing the quarterly consolidated financial statements: Applied
2. Changes in accounting policies, changes in accounting estimates, and restatement
3. • Changes in accounting policies due to revisions to accounting standard: No
     ② Changes in accounting policies due to other reasons: No
     ③ Changes in accounting estimates: No
     ④ Restatement: No
4. Number of issued shares (common stock)
5. • Number of shares outstanding at the end of the period (including treasury stock)

As of June 30, 2023	96,334,226
As of December 31, 2022	96,292,401

• Number of shares of treasury stock at the end of period

As of June 30, 2023	180,073
As of December 31, 2022	179,414

• Average number of shares during the period (cumulative)

FY2023 2nd quarter:	96,130,698
FY2022 2nd quarter:	96,115,689

*Quarterly review procedures:

This quarterly financial flash report is out of scope of the review procedures by certified public accountants or auditing firms

*Appropriate use of business forecast; other special items:

Performance Forecasts are based on judgments and estimated that have been made on the basis of currently available information. Change in the company's business environment and in market trends may cause actual result to differ materially from these forecast figures.

1. Qualitative Information on Quarterly Results

(1) Analysis of operating results

In the Japanese economy of the consolidated cumulative period of the second quarter of this fiscal year, personal consumption improved including gradual expansion in service consumption caused by downgrade of the legal status of the COVID-19 and the economy gradually recovered due to strong capital investment and inbound demand. On the other hand, there were also concerns about the risk of downward pressure on the Japanese economy by deteriorating overseas economies in ongoing inflation due to yen depreciation, sharp price increase of resource and global monetary tightening. In the U.S., personal consumption remained strong and inflation rate declined, and the economy showed gradual recovery. The Chinese economy recovered rapidly through to early spring following the termination of the Zero-Covid Policy, but the recovery after the economic restart was delayed due to slowdown in personal consumption, deterioration of the real estate market, and sluggish growth in exports. As for ASEAN, consumer sentiment continued to improve and strong consumption drove economic recovery in Indonesia. In Malaysia, active consumption and inbound demand drove continuous recovery of economy, meanwhile, exports tended to be weak due to a slump in external demand. In Thailand, the backdrop of sluggish global demand led to decline of exports and the pace of economic recovery weakened.

Under these circumstances, sales increased year-on-year in Japan as a mainstay and ASEAN and exceeded the market growth on an automotive production volume basis for the cumulative second quarter because of the sales situation in recovery trend. Consequently, the sales increase rate exceeded the market growth rate in Japan and ASEAN.

As a result, for the cumulative second quarter, the sales was 75,770 million yen (up 20.4% year-on-year). The operating income was 3,777 million yen (up 236.9% year-on-year) due to favorable impact of sales increase and progress in pass-through on the sharp rise in raw materials costs, etc. The ordinary income was 3,783 million yen (up 134.4% year-on year), and the net income attributable to the parent company was 2,521 million yen (up 99.1% year on-year).

Results by each segment are as follows:

1.Auto-Components business

Supply constraints of semiconductors was almost resolved, and automotive production, which reduced plant operation days, has been recovering in two regions, Japan and ASEAN. As a result, the sales was 71,832 million yen (up 20.8％ year-on-year) and achieved a level higher than the automotive production market growth affected by the pass-through, and the operating income was 3,623 million yen (up 274.8％ year-on- year).

2.After-Market business

As for the after-market business, sales for automotive accessory stores and for the dealer options remained strong, and the sales was 4,758 million yen (up 12.9% year-on-year), and the operating income was 167 million yen (up 8.6% year-on-year).

（３）Description of future outlooks such as consolidated earnings forecast

There is no revision to the earnings forecast for the FY2023 announced on May 11.

As for the future statements of performance forecast, etc. contained in this material, the statements are based on the information currently available to the company and certain information that the company deems reasonable. Please note that actual results may differ due to various factors.

Distribution of midterm dividends is 5.5 yen per share in line with the dividend forecast announced on May 11, 2023, which increased by one yen from last year.

Year-end dividend forecast has not been changed from the forecast announced on May 11, 2023.

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2. Consolidated Financial Statement

(1) Consolidated Balance Sheets			(Millions of yen)
	Previous Fiscal Year End	Second Quarter End
		(As of December 31, 2022)	(As of June 30, 2023)
Assets
Current assets
Cash and deposits	8,631	9,718
Notes and accounts receivable-trade	27,121	26,652
Electronically recorded monetary claims-operating	388	159
Merchandise and finished goods	5,438	5,729
Work in process	2,776	2,353
Raw materials and supplies	5,284	5,581
Other	13,698	10,285
Allowance for doubtful accounts	(60)	(48)
Total current assets	63,280	60,432
Noncurrent assets
Property, plant and equipment
Buildings and structures, net	12,332	12,250
Machinery, equipment and vehicles, net	17,753	18,708
Tools, furniture and fixtures, net	2,633	2,851
Land	2,788	2,815
Lease assets, net	2,983	3,739
Construction in progress		3,164	2,540
Total property, plant and equipment		41,656	42,906
Intangible assets
Other	859	825
Total intangible assets	859	825
Investments and other assets
Investment securities	2,268	2,784
Long-term loans receivable	1,128	741
Deferred tax assets	5,569	5,583
Other	11,155	11,861
Allowance for doubtful accounts		(3)	(2)
Total investments and other assets		20,118	20,969
Total noncurrent assets		62,634	64,701
Total assets		125,915	125,133

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			(Millions of yen)
	Previous Fiscal Year End	Second Quarter End
		(As of December 31, 2022)	(As of June 30, 2023)
Liabilities
Current liabilities
Notes and accounts payable-trade	36,982	33,951
Short-term loans payable	1,400	1,000
Current portion of long-term loans payable	2,022	1,836
Lease obligations	541	540
Income taxes payable	453	1,002
Accrued expenses	5,112	4,866
Provision for bonuses	1,113	2,274
Provision for directors' bonuses	36	86
Provision for product warranties	1,983	2,061
Other		8,840	6,834
Total current liabilities	58,485	54,454
Noncurrent liabilities
Long-term loans payable	920	-
Lease obligations	2,892	3,694
Deferred tax liabilities	153	170
Retirement benefits	8,182	8,218
Asset retirement obligations	172	164
Provision for environmental measures	23	23
Other		76	29
Total noncurrent liabilities		12,421	12,300
Total liabilities	70,907	66,755
Net assets
Shareholders' equity
Capital stock	8,986	8,996
Capital surplus	2,505	2,515
Retained earnings	44,660	46,749
Treasury stock		(55)	(55)
Total shareholders' equity		56,096	58,206
Accumulated other comprehensive income
Valuation difference on other securities.	91	95
Foreign currency translation adjustment	41	1,167
Adjustment retirement benefits	(1,895)	(1,824)
Total accumulated other comprehensive income		(1,762)	(560)
Minority interests		673	732
Total net assets		55,007	58,378
Total liabilities and net assets		125,915	125,133

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