Japan Display : Consolidated Financial Results for the Nine Months of Fiscal Year 2020 (Japanese GAAP)

February 10, 2021

Japan Display Inc.

Consolidated Financial Results for FY21/3 Q3 (Japanese GAAP)

Company name:	Japan Display Inc. ("JDI")
Security code:	6740
Listing:	Tokyo Stock Exchange (First Section)
Website:	https://www.j-display.com/english/
Representative:	Scott Callon, Chairman, CEO, & Representative Executive Officer,
Contact:	Akihito Okochi, CFO & Representative Executive Officer
Phone:	[phone]

(Figures in this report are rounded down to the nearest million yen.)

1. FY21/3 Q3 Consolidated Financial Results (April 1, 2020 to December 31, 2020)

(1) Results of operations

(Millions of yen, except per share amounts)Net sales ················································· Operating income (loss) ······························· Ordinary income (loss) ································· Net income (loss) attributable to owners of the parent Net income (loss) per share

-Basic (Yen) ········································· -Diluted (Yen) ········································

(Reference) Comprehensive income (loss) ··········

9 months ended	YoY	9 months ended	YoY
Dec 31, 2019	(%)	Dec 31, 2020	(%)
387,775	(16.7)	272,542	(29.7)
(32,624)	-	(18,627)	-
(46,723)	-	(25,964)	-
(110,885)	-	(22,926)	-
(131.04)	-	(9.72)
-	-	-
(109,175)	-	(21,461)	-

(2) Financial position

Total assets ··············································· Net assets ················································· Shareholders' equity ratio (%) ························· (Reference) Shareholders' equity ······················

2. Dividends

Q1-endQ2-end

(Millions of yen)
Mar 31, 2020	Dec 31, 2020
389,746	236,687
53,363	36,908
13.1	14.5
51,103	34,395
(Yen)
Total

Q3-end

FY-end

FY20/3 ····················· FY21/3 ·····················

- -0.00 0.00

-

0.00

0.00

-FY21/3 (forecast) ········

0.00

0.00

Note 1. Changes from the most recently announced dividend forecast: None

Note 2. Above "2. Dividends" shows the status of dividends for common stock. See " (Reference) Dividends for Class Shares" below for dividends for class shares (unlisted) that have different rights from common stock issued by JDI.

3. FY21/3 Full-Year Consolidated Earnings Forecast (April 1, 2020 to March 31, 2021)

FY21/3 (full year)

Amount (Millions of yen)YoY ChangeNet sales

342,542

(32.0)%

Operating income

(29,625)

-Note: Changes from the most recently announced financial forecast: Yes

JDI revised its FY21/3 net sales forecast and newly announced operating income forecast today. For details, please refer to "Note Concerning the Consolidated Earnings Forecast" on page 7.

• 4. Other

• (1) Changes in significant subsidiaries to scope of consolidation: None

  (Changes in specified subsidiaries resulting in the change of consolidation scope)

  Newly consolidated: None

  Removed from consolidation: None

• (2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: Yes

  For details please see "(Ⅲ) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements" in "(4) Notes on Quarterly Consolidated Financial Statements" in the attachment.

• (3) Changes in accounting policy, changes in accounting estimate and retrospective restatements

  • (i) Changes in accounting policy in accordance with amendments to accounting standards:

  • (ii) Changes in accounting policy other than (i) above:

  • (iii) Changes in accounting estimates:

  • (iv) Retrospective restatement:

  None None None None

• (4) Number of shares outstanding

  • (i) Number of shares outstanding (including treasury shares) at period-end

    FY21/3 Q3: 2,538,166,300

    FY20/3: 2,538,165,800

  • (ii) Number of treasury shares at period-end

    FY21/3 Q3: 3

    FY20/3: 3

(iii)Average number of shares outstanding (excluding treasury shares) during the period FY21/3 Q3 (9 months): 2,359,818,524

FY20/3 Q3 (9 months): 846,165,797

Note: The Class A preferred shares, the Class B preferred shares and the Class D preferred shares have the same rights as common shares in regard to rights to receive dividends of surplus, and are therefore included in the number of shares outstanding at the end of periods and the average number of shares outstanding during the periods.

* Quarterly earnings reports are not subject to quarterly review procedures by independent auditors.

Proper use of earnings forecasts and other matters warranting special mention

Forward-looking information, such as earnings forecasts in this document, is based on information available to JDI at the time the document was prepared and on management's reasonable assumptions. Such information should not be interpreted as a guarantee of future performance or results. Furthermore, forward-looking information is necessarily subject to a number of factors that may cause actual results to differ materially from those results implied by the expectations suggested by such information.

(Reference)

Dividends for Class Shares

Dividends per share for class shares that have different rights to common stock is below.

(Yen)

FY-end	Total
FY20/3 ·······································	0.00	0.00

Q1-end

Class A preferred shares

Q2-endQ3-end

FY21/3 ······································· FY21/3 (forecast)

-

0.00

-0.00

0.00

(Yen)Class B preferred shares FY20/3 ······································· FY21/3 ······································· FY21/3 (forecast)

FY-end 0.00

Q1-endQ2-endQ3-end

Total 0.00

-0.00

-0.00

0.00

(Yen)Class D preferred shares FY21/3 ······································· FY21/3 (forecast)

Q2-end 0.00

Q1-end

Q3-endFY-endTotal

-0.00

0.00

Attachments

1.

Quarterly Results Information

(1) Overview of Results of Operations

FY21/3 Q3 (9 months) Consolidated Results of Operations (April 1, 2020 to December 31, 2020)

Year on year comparison

(Millions of yen)

FY20/3 Q3 (9 months)	FY21/3 Q3 (9 months)	YoY
Change	(%)
Mobile Device Category Automotive Category Non-Mobile Device Category Net sales	271,483	167,729	(103,753)	(38.2)
79,616	62,774	(16,841)	(21.2)
36,676	42,038	5,361	14.6
387,775	272,542	(115,233)	(29.7)
Gross profit (loss)	(4,754)	4,894	9,649	-
Operating income (loss)	(32,624)	(18,627)	13,997	-
Ordinary income (loss)	(46,723)	(25,964)	20,758	-
Net income (loss) attributable to owners of the parent	(110,885)	(22,926)	87,959	-
EBITDA*	(17,541)	(7,812)	9,728	-

Notes:

EBITDA = Operating income + Depreciation (operating costs) + Amortization of goodwillThe business environment surrounding JDI in the first nine months of FY21/3 remained difficult, as major customers who manufacture smartphones are increasingly adopting OLED displays while fierce competition continues in the small and medium-sized display industry. As a result, orders for the company's liquid crystal displays decreased

significantly. Also, restrictions placed on production due to the coronavirus pandemic and related lockdowns and supply chain disruptions in the first half of FY21/3 were lifted in the second half, but a shortage of semiconductor parts and a rise in prices caused by the rapid increase in demand are starting to affect production at JDI and its customers.

Given these circumstances, JDI worked to further reduce costs, managing to lower its fixed costs by approximately

JPY 25 billion over the same nine-month period year-on-year (YoY). As part of these fixed cost reductions, the transfer of the Hakusan Plant (Hakusan City, Ishikawa Prefecture), which has had operations suspended since July 2019, was completed on October 1, 2020, resulting in an annual cost saving of approximately JPY 8 billion. The transfer of the plant, a non-performing asset, resulted in reducing liabilities by JPY 74.3 billion (partly due to offsetting with accounts receivable) by allocating the income from the transfer to the repayment of advances received from a customer, which also helped to improve the balance sheet and cash flow. In the third quarter, JDI also recorded a gain on sales of fixed assets due to the transfer of the plant.

In addition, JDI focused on compensating for a drop in sales due to a decrease in orders from a major customer, and achieved an increase in orders in new company business areas: OLEDs for wearable devices and ultra-high-definition liquid crystal displays for VR devices. However, orders for high-value-added modules for smartphone displays, which account for the dominant portion of sales, decreased more than the company expected at the beginning of the nine months. Moreover, although automotive displays have recovered sharply since the second quarter, they have not reached the level of the previous year's nine-month period. Consequently, overall sales for the nine-months of FY21/3 decreased sharply by approximately 30% YoY.

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