Itoki : Financial Results for the First Six Months of the Fiscal Year Ending December 31, 2023 (Consolidated Basis)（526KB）

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

August 7, 2023

Consolidated Financial Results

for the First Six Months of the Year Ending December 31, 2023

Company name:	ITOKI CORPORATION
Listing:	Tokyo Stock Exchange
Stock code:	7972
URL:	https://www.itoki.jp/
Representative:	Koji Minato, President & Representative Director
	Yoshiaki Moriya, Director, Managing Executive Officer, General Manager of
Inquiries:	Administrative Division
	TEL: [phone] (from overseas)

Scheduled date to file Quarterly Report:	August 7, 2023
Scheduled date to commence dividend payments:	－
Preparation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results presentation meeting:	Yes (for institutional investors and security
	analysts)

(Millions of yen with fractional amounts discarded, unless otherwise noted)

1. Consolidated performance for the first six months of the fiscal year ending December 31, 2023 (from January 1, 2023 to June 30, 2023)

(1) Consolidated operating results (cumulative)				(Percentages indicate year-on-year changes.)
	Net sales		Operating profit		Ordinary profit		Profit attributable to
				owners of parent
First six months of the fiscal	Millions of yen	%	Millions of yen		%	Millions of yen		%	Millions of yen		%
year ending
December 31, 2023	68,190	7.0	7,002		60.2	7,095		60.7	4,707		28.1
December 31, 2022	63,756	3.4	4,371		47.0	4,416		56.0	3,676		60.5

Note: Comprehensive income

First six months of the fiscal year ending December 31, 2023 First six months of the fiscal year ending December 31, 2022

5,134 million of yen (40.1%)

3,664 million of yen (47.0%)

	Earnings per share	Diluted earnings per share
First six months of the fiscal	Yen	Yen
year ending
December 31, 2023	103.90	91.23
December 31, 2022	81.27	－

(2) Consolidated financial position

		Total assets	Net assets	Equity ratio	Net assets per share
		Millions of yen	Millions of yen	%	Yen
First six months of the fiscal
year ending	December 31,	111,693	53,418	47.7	1,176.10
2023
Fiscal year ended December	115,288	49,910	43.2	1,100.33
31, 2022
Reference:	Equity
	First six months of the fiscal year ending December 31, 2023:	53,334 million of yen
	Fiscal year ended December 31, 2022:		49,825 million of yen

2. Cash dividends

					Annual dividends
			First quarter-end	Second quarter-end	Third quarter-end	Fiscal year-end	Total
		Yen		Yen		Yen	Yen	Yen
Fiscal year ended December		－	0.00		－	37.00	37.00
31, 2022
Fiscal year ending December		－	0.00
31, 2023
Fiscal year ending December					－	32.00	32.00
31, 2023 (Forecast)
Note:	Revision to the forecasts of cash dividends most recently announced: Yes
Note:	Breakdown of fiscal year-end dividends for the fiscal year ended December 31, 2022
	Ordinary dividend:	17.00 yen
	Special dividend:	20.00 yen

3. Consolidated earnings forecasts for the fiscal year ending December 31, 2023 (from January 1, 2023 to December 31, 2023)

(Percentages indicate year-on-year changes.)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Earnings
		owners of parent	per share
	Millions of			Millions of		Millions of		Millions of
	yen		%	yen	%	yen	%	yen	%	Yen
Fiscal year ending December	130,000		5.4	7,500	63.7	7,500	79.5	4,800	(9.3)	105.84
31, 2023
Note: Revision to the consolidated earnings forecast most recently announced:	Yes

* Notes

1. Changes in significant subsidiaries during the first six months of the fiscal year ending December 31, 2023:
   (changes in specified subsidiaries accompanying changes in scope of consolidation)

New: －companies (Company names)

/ Exception: －companies

None

(Company names)

(2) Application of specific accounting for preparing the consolidated quarterly financial statements:

None

1. Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements after error corrections

a. Changes in accounting policies due to revisions to accounting standards and other regulations:	Yes
b. Changes in accounting policies due to other reasons:	None
c. Changes in accounting estimates:	None
d. Restatement of prior period financial statements after error corrections:	None

(Note) For details, please refer to "2. Consolidated Quarterly Financial Statements and Main Notes" - "(4) Notes on Consolidated Quarterly Financial Statements (Changes in Accounting Policies)" on page 12 of the appendix.

1. Number of issued shares (common shares)
   a. Total number of issued shares at the end of the period (including treasury shares)

As of June 30, 2023	45,664,437	shares
Fiscal year ended December 31, 2022	45,664,437	shares
b. Number of treasury shares at the end of the period
As of June 30, 2023	316,086	shares
Fiscal year ended December 31, 2022	381,659	shares
c. Average number of shares during the period (cumulative from the beginning of the fiscal year)
As of June 30, 2023	45,304,566	shares
As of June 30, 2022	45,231,921	shares

• Quarterly financial results reports are not required to be subjected to quarterly reviews conducted by certified public accountants or an audit corporation.
• Explanation concerning proper use of earnings forecasts and other specific matters

All forward-looking statements (earnings forecasts, etc.) in this document are prepared based on information currently available to the Company and on certain assumptions deemed to be reasonable. Actual results may differ significantly from the forecast figures due to various factors. For notes on assumptions for the earnings forecasts and notes on usage of the earnings forecasts, please refer to "1. Qualitative Information on Quarterly Financial Results" - "(3) Explanation of Forward Looking Information for Earnings Forecasts, Etc." on page 4 of the appendix.

• Appendix Table of Contents
• 1. Qualitative Information on Quarterly Financial Results …………………………………………………………………2
     (1) Explanation of Operating Results …………………………………………………………………………… 2
     (2) Explanation of Financial Position …………………………………………………………………………… 3
     (3) Explanation of Forward Looking Information for Earnings Forecasts, Etc. ……………………………………………4
  2. . Consolidated Quarterly Financial Statements and Main Notes …………………………………………… 6
     (1) Consolidated Quarterly Balance Sheets …………………………………………………………………………… 6
     (2) Consolidated Quarterly Statements of Income and Consolidated Quarterly Statements of Comprehensive Income …8
     (3) Consolidated Quarterly Statements of Cash Flows…………………………………………………………… 10
     (4) Notes on the Consolidated Quarterly Financial Statements …………………………………………………………12
     (Notes on Assumption of Going Concern)…………………………………………………………………1 2 (Notes in the Event of Significant Fluctuations in the Amount of Shareholders' Equity )………………12
     (Changes in Accounting Policies)…………………………………………………………………………………12
     (Additional Information)…………………………………………………………………………………………1 2 (Segment Information, Etc.)………………………………………………………………………………1 3

1

1. Qualitative Information on Quarterly Financial Results

(1) Explanation of Operating Results

In the current fiscal year, which is the final year of the medium-term management plan RISE ITOKI 2023, the Group will continue to promote various measures based on the structural reform project. In the first six months of the current consolidated cumulative period, the Group aimed to become a highly profitable corporation with a robust structure. We strove to increase sales and profit through measures such as proposing new work styles and workplaces in order to fulfill a leading role in creating a post-COVID working environment, and conducting sales activities that focus on increasing value.

(Millions of yen)

	Second quarter-end	Second quarter-end
	2022	2023	Increase/decrease	Increase/decrease
	Consolidated	Consolidated	(amount)	(%)
	cumulative period	cumulative period
Net sales	63,756	68,190	4,434	7.0%
Gross profit	24,243	27,019	2,776	11.5%
Selling, general and administrative	19,871	20,017	145	0.7%
expenses
Operating profit	4,371	7,002	2,630	60.2%
Non-operating income	289	239	(49)	(17.2%)
Non-operating expenses	245	147	(98)	(40.0%)
Ordinary profit	4,416	7,095	2,679	60.7%
Extraordinary income	925	16	(908)	(98.2%)
Extraordinary losses	108	31	(76)	(70.7%)
Profit before income taxes	5,232	7,079	1,847	35.3%
Total income taxes	1,628	2,371	743	45.6%
Profit per share	3,604	4,708	1,104	30.6%
Profit attributable to owners of	3,676	4,707	1,031	28.1%
parent

(i) Net sales

Net sales were 68,190 million yen, an increase of 4,434 million yen (7.0%) year-on-year.

• The workplace business performed well mainly due to renovation projects, office relocations, etc., to fit new hybrid work styles.
• In the equipment and public works-related business, demand remained strong for public facility equipment such as display cases for museums and art galleries and digital signage remained firm.
• In the IT and sharing business, there was strong performance by the system development business and the system verification business, which has been promoted as the second pillar. The sharing business for office space also performed well.

1. Gross profit

Gross profit was 27,019 million yen, an increase of 2,776 million yen (11.5%) year-on-year.

• In the workplace business, while predicting the impact of soaring raw material prices, profit increased significantly due to an improved profit margin as the effect of increased revenue and an improvement in value provided.
• In the equipment and public works-related business, while predicting the impact of soaring raw material prices, profit increased due to the effect of increased revenue caused by increased demand and strong sales of equipment for public facilities, and due to an improved profit margin.
• In the IT and sharing business, the system development business, system verification business, and office sharing business performed well.

(iii) Selling, general and administrative expenses

Selling, general and administrative expenses were 20,017 million yen, a slight increase of 145 million yen (0.7%) year-on-year. This increase was the result of factors such as the planned implementation of strategic expenditures, etc., for future leaps in performance such as strengthening IT infrastructure to promote DX, and hiring of mid-career human resources. It was also the result of SG&A expenses reductions such as continuing to cut logistics costs through the structural reform project.

(iv) Operating profit

As a result of the above, operating profit was 7,002 million yen, an increase of 2,630 million yen (60.2%) year-on-year. This means that we were able to secure operating profit that exceeded expectations.

• In the workplace business, profit increased significantly due to an improved profit margin as the effect of increased revenue and an improvement in value provided.

2