Komori : 4Q ended Mar. 31, 2024(1MB)

Komori Corporation

Results of Operations for the Fiscal Year Ended March 31, 2024

REPORTED BY KOMORI CORPORATION (Japanese GAAP)

May 14, 2024

Company name:	KOMORI CORPORATION
Representative:	Mr. Satoshi Mochida
	Representative Director, President and CEO
Securities code:	6349 (Tokyo Stock Exchange)
Contact:	Mr. Iwao Hashimoto
	Director, Senior Operating Officer
	Phone: [phone]
Annual General Meeting of Shareholders:	URL (https://www.komori.com)
June 18, 2024
Payment date of year-end dividend:	June 19, 2024

Preparation of supplementary materials for financial results: Yes

Holding of presentation meeting for financial results: Yes (for financial analysts/investors)

1. Consolidated Business Results for Fiscal 2024 (April 1, 2023 to March 31, 2024)

(1) Results of operations				(In millions of yen, rounded down)
	Fiscal year ended	%	Fiscal year ended	%
	March 31, 2024		March 31, 2023
Net sales		104,278		6.5	97,914	11.7
Operating income		4,898		(14.3)	5,719	152.2
Ordinary income		6,797		2.8	6,611	93.9
Profit attributable to owners of parent		4,641		(18.8)	5,716	(7.2)
						(Yen)
Basic earnings per share		86.79			104.85
Diluted earnings per share		-			-
						(%)
ROE		4.2			5.4
ROA		4.1			4.1
Operating income to net sales ratio		4.7			5.8
Notes:
1. Comprehensive income:	75.6	%
Fiscal year ended March 31, 2024: 11,978 million yen
Fiscal year ended March 31, 2023: 6,819 million yen	(16.0)	%

1. Share of profit of entities accounted for using equity method: Fiscal year ended March 31, 2024: -
   Fiscal year ended March 31, 2023: -
2. Percentage figures given for the first four items in the above table represent the percentage increase/decrease on a year-on-year basis.

(2) Financial position					(In millions of yen, rounded down)
				March 31, 2024		March 31, 2023
Total assets				167,588		165,523
Total net assets				114,467		107,133
Equity ratio (%)				68.3		64.6
Net assets per share (Yen)			2,157.34		1,961.88
Note:		114,467 million yen
Equity as of:	March 31, 2024:
	March 31, 2023:	106,965 million yen
(3) Summary of statements of cash flows			(In millions of yen, rounded down)
				Fiscal year ended		Fiscal year ended
				March 31, 2024		March 31, 2023
Net cash provided by (used in) operating activities	(8,051)		4,475
Net cash provided by (used in) investing activities	483		(526)
Net cash provided by (used in) financing activities	(4,874)		(4,077)
Cash and cash equivalents at end of the period			49,664		60,945

(English translation of "KESSAN TANSHIN" originally issued in Japanese.)

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Komori Corporation

2. Dividends

		Fiscal year ended	Fiscal year ended	Fiscal year ending
		March 31, 2023	March 31, 2024	March 31, 2025
				(Forecast)
Annual cash dividends per share (Yen)	45.00	60.00	40.00
	First quarter period-end dividends	-	-	-
	Second quarter period-end dividends	15.00	15.00	20.00
	Third quarter period-end dividends	-	-	-
	Year-end dividends	30.00	45.00	20.00
Total cash dividends for the year (Millions of yen)	2,464	3,198	-
Dividend payout ratio (Consolidated) (%)	42.9	69.1	36.6
Ratio of dividends to net assets (Consolidated) (%)	2.3	2.9	-

3. Forecast of Consolidated Business Results for the Fiscal Year Ending March 31, 2025 (April 1, 2024 to March 31, 2025)

(In millions of yen, rounded down)

	Sixth months ending	%	Fiscal year ending	%
	September 30, 2024		March 31, 2025
Net sales	50,200	6.5	109,400	4.9
Operating income	1,200	170.5	5,800	18.4
Ordinary income	700	(64.7)	5,400	(20.6)
Profit attributable to owners of parent	500	(56.2)	5,800	25.0
Basic earnings per share (Yen)	9.42	-	109.31	-

Note:

Percentage figures given for the first four items in the above table represent the percentage increase/decrease on a year-on-year basis.

*Notes

(1) Changes in significant subsidiaries during the fiscal year under review (Changes in the scope of consolidation

accompanying changes in specified subsidiaries): No

(2) Changes in accounting policies; changes in accounting estimates; restatements

1.	Changes accompanying revisions to accounting standards:	No
2.	Changes other than those in item 1. above:	No
3.	Changes in accounting estimates:	Yes
4.	Restatements:	No

1. Number of shares outstanding (common stock)

1. Number of shares outstanding (including treasury stock) as of:

March 31, 2024: 55,428,840 shares

March 31, 2023: 56,890,740 shares

2. Number of treasury stock as of:

March 31, 2024:	2,369,371 shares
March 31, 2023:	2,368,980 shares
3. Average number of shares during the period:
Fiscal year ended March 31, 2024:	53,483,718 shares
Fiscal year ended March 31, 2023:	54,522,102 shares

(English translation of "KESSAN TANSHIN" originally issued in Japanese.)

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Komori Corporation

Reference: Overview of Non-Consolidated Performance

1. Non-Consolidated Performance for the Fiscal Year Ended March 31, 2024 (April 1, 2023 to March 31, 2024)

(1) Non-Consolidated Operating Results		(In millions of yen, rounded down)
	Fiscal year ended	%	Fiscal year ended	%
	March 31, 2024		March 31, 2023
Net sales	71,716	1.7	70,525	19.9
Operating income	3,741	(15.5)	4,428	-
Ordinary income	5,972	9.7	5,445	352.0
Profit	6,096	(21.0)	7,720	71.1
				(Yen)
Basic earnings per share	113.99		141.60
Diluted earnings per share	-		-

Note:

Percentage figures given for the first four items in the above table represent the percentage increase/decrease on a year-on-year basis.

(2) Non-Consolidated Financial Condition		(In millions of yen, rounded down)
	March 31, 2024	March 31, 2023
Total assets	138,678	138,298
Total net assets	105,008	98,029
Equity ratio (%)	75.7	70.9
Net assets per share (Yen)	1,979.08	1,797.99

Note:		105,008 million yen
Equity as of:	March 31, 2024:
	March 31, 2023:	98,029 million yen

* Implementation status of audit procedures

This financial flash report (Kessan Tanshin) is not subject to auditing by a certified public accountant or auditing firm.

* Disclaimer regarding the appropriate use of performance forecasts and other remarks

The aforementioned forecasts are based on management's assumptions and beliefs held in light of information currently available to it and accordingly involve risks and uncertainties that may cause actual results to differ materially from forecasts. These uncertainties include, but are not limited to, changes in economic conditions, market trends, changes in foreign currency exchange rates and other factors.

For qualitative information regarding consolidated operating results forecasts, please refer to "1. REVIEW OF OPERATIONS AND FINANCIAL CONDITION (4) Outlook" in page 11 of the attached material.

Materials for the summary result presentation in Japanese will be disclosed through the Tokyo Stock Exchange's Timely Disclosure Network, known as TDnet, on May 20, 2024. The same materials will be posted on Komori's website. Also, English translation of these materials will be posted on the Company's website at: https://www.komori.com/contents_com/ir/index.htm

(English translation of "KESSAN TANSHIN" originally issued in Japanese.)

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Index

1. REVIEW OF OPERATIONS AND FINANCIAL CONDITION
2. 1. Fiscal 2024 Operating Results
   2. Fiscal 2024 Financial Condition
   3. Fiscal 2024 Consolidated Cash Flows
   4. Outlook
3. FUNDAMENTAL APPROACH TO THE SELECTION OF ACCOUNTING STANDARDS
4. CONSOLIDATED FINANCIAL STATEMENTS
5. 1. Consolidated Balance Sheets
   2. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
   3. Consolidated Statements of Changes in Net Assets
   4. Consolidated Statements of Cash Flows
   5. Notes to Consolidated Financial Statements (Notes on Premise as a Going Concern) (Changes in Accounting Estimates)
      (Matters Related to Consolidated Statements of Income) (Consolidated Segment Information)
      (Per Share Information) (Important Subsequent Events)

1. 5 P. 5 P. 10 P. 10 P. 11

P. 13

1. 14 P. 14 P. 16 P. 18 P. 20 P. 21 P. 21 P. 21 P. 21 P. 22 P. 27 P. 28

(English translation of "KESSAN TANSHIN" originally issued in Japanese.)

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Komori Corporation

1. REVIEW OF OPERATIONS AND FINANCIAL CONDITION

(1) Fiscal 2024 Operating Results

(1) Overview

During the fiscal year ended March 31, 2024, the outlook for the global economy grew ever murkier due to the prolongation of the Ukraine situation, along with the recent emergence of geopolitical risks in the Middle East. On the other hand, signs of recovery were observed as a slowdown in the pace of inflation, which has been fueled by the post- pandemic expansion of economic activities, prompted financial authorities in major countries to engage in ongoing discussions regarding the discontinuance of supplemental monetary tightening measures or when to implement monetary easing.

(2) Consolidated Performance

The domestic printing machinery market has seen an ongoing trend toward executing investment aimed at improving productivity, enhancing efficiency and otherwise streamlining printing operations in light of surging prices of energy and printing supplies as well as ever higher labor costs and pressing shortages of workers. Amid this trend, Komori secured a robust volume of orders, especially for offset printing presses, and thereby achieved growth in net sales thanks to the positive effect of marketing activities focused on delivering proposals designed to help customers address the issues described above and enhance ROI via the use of "advance" models. In North America, continued high interest rates caused printing companies to take cautious stances toward implementing capital expenditures. However, having received a large number of orders in the previous fiscal year, some of those remaining orders were recorded as sales in the fiscal year under review, contributing to sales growth in this region. In Europe, there has been a trend toward taking a cautious stance toward undertaking capital expenditures on the back of inflation and interest rate hikes. However, net sales still exceeded those of the previous fiscal year, due in part to the appreciation of the euro. In Greater China, Komori's operating results were affected by a trend toward the postponement of capital expenditures due mainly to supply chain reorganization undertaken by overseas corporations, foreign exchange fluctuations that resulted in the depreciation of the Chinese yuan, and stagnation in the real estate market. On the other hand, some major printing companies pushed ahead with capital expenditures aimed at executing facility upgrades to counter the growing seriousness of labor shortages and ongoing surges in personnel expenses via the promotion of labor saving and facility automation. This, in turn, enabled Komori to achieve overall expansion in net sales in Great China compared with the previous fiscal year. In Other Regions, which include ASEAN and India, demand for offset printing presses continued to grow, but delays in the signing of security printing press supplier agreements caused net sales in these regions to decline.

Taking the above factors into account, orders received in the fiscal year under review rose 1.8% from the previous fiscal year to ¥99,114 million, while consolidated net sales grew 6.5% year on year to ¥104,278 million. The cost of sales ratio deteriorated year on

(English translation of "KESSAN TANSHIN" originally issued in Japanese.)

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year due to such factors as surging raw material prices. Selling, general and administrative (SG&A) expenses increased year on year, reflecting such factors as the depreciation of the yen and resulting growth in personnel expenses incurred by overseas consolidated subsidiaries, as well as increased travel and transportation expenses in the post-COVID- 19 era. As a result, operating income amounted to ¥4,898 million, compared with operating income of ¥5,719 million in the previous fiscal year. Ordinary income was ¥6,797 million, an improvement from ordinary income of ¥6,611 million in the previous fiscal year.

Income before income taxes amounted to ¥5,805 million, compared with income before income taxes of ¥6,604 million in the previous fiscal year, due mainly to the impact of recording an impairment loss during the fiscal year under review. Profit attributable to owners of the parent totaled ¥4,641 million, compared with profit attributable to owners of the parent of ¥5,716 million in the previous fiscal year.

Overseas sales totaled ¥69,700 million, up 6.2% from the previous fiscal year, with the ratio of overseas sales to net sales at 66.8%.

(3) Overview of Consolidated Net Sales by Region

Consolidated net sales during the fiscal year under review amounted to ¥104,278 million, representing a 6.5% increase from the previous fiscal year. An overview of consolidated net sales by region is set out below.

Net sales

	Japan
Breakdown	North America
Europe
	Greater China
	Other Regions

Fiscal Year Ended

March 31, 2023

97,914

32,275

8,087

22,549

17,637

17,362

(In millions of yen)

Fiscal Year Ended	Increase /
March 31, 2024	(Decrease)
	(%)
104,278	6.5
34,578	7.1
11,683	44.5
22,754	0.9
18,316	3.8
16,944	(2.4)

Domestic Sales

In the domestic market, these has been a trend toward investing in offset presses and other facilities with the aim of streamlining printing operations, while government subsidies contributed to the facilitation of such investment. The volume of orders received has thus remained on a growth track that has been ongoing from the previous fiscal year. Consequentially, domestic sales increased 7.1% year on year to ¥34,578 million, as the remaining portion of orders received in the previous fiscal year was recorded as sales in the fiscal year ended March 31, 2024, while the higher volume of orders received in the fiscal year under review contributed to sales growth.

(English translation of "KESSAN TANSHIN" originally issued in Japanese.)

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North America

In North America, demand for high-value-added printing presses has grown stronger especially among major corporations. However, overall demand was affected by a trend toward taking a prudent stance with regard to executing capital expenditures due to high interest rates. As a result, the volume of orders received decreased year on year. On the other hand, the robust volume of orders received in the second half of the previous fiscal year contributed to sales in the fiscal year under review following the completion of their post-delivery inspections. Taking these factors into account, net sales in this region grew 44.5% year on year to ¥11,683 million.

Europe

In Europe, printing companies have taken a prudent stance toward implementing capital expenditure plans amid the prolongation of the Ukraine situation and ongoing fallout from inflation, along with hikes in interest rates. Moreover, operating results were affected by a subsidence of the robust sales of security printing presses in the previous fiscal year, as well as delays in recording sales (previously scheduled for the fiscal year under review) of some large presses that are currently expected to take place in the fiscal year ending March 31, 2025. However, net sales in this region amounted to ¥22,754 million, a year- on-year increase of 0.9%, due in part to the impact of the appreciation of the euro.

Greater China

In Greater China, the printing market was significantly affected by supply chain reorganization undertaken by overseas corporations, the depreciation of the Chinese yuan, and stagnation in the real estate market. These circumstances caused middle-sized enterprises to take a prudent stance toward executing investment. On the other hand, major corporations seeking to improve profitability remained active in promoting investment aimed at achieving operational streamlining. Consequentially, net sales in this region increased 3.8% year on year to ¥18,316 million.

Other Regions

Other Regions include ASEAN, India and Oceania as well as Central and South America. Sales of offset printing presses rose significantly in India and Central and South America as these economies continued to benefit from post-pandemic recovery. Sales similarly expanded from the previous fiscal year in all other regions. However, sales of security printing presses decreased in the fiscal year under review due to delays in the receipt of orders. As a result, net sales in Other Regions declined 2.4% year on year to ¥16,944 million.

(English translation of "KESSAN TANSHIN" originally issued in Japanese.)

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1. Business Performance by Reportable Segment
   1. Japan
   The "Japan" reportable segment includes the Company's sales in Japan and direct sales to distributors in certain overseas regions as well as sales of security printing presses to overseas customers. These overseas regions consist of Asia (excluding a portion of Greater China) and Central and South America, as well as other regions. Reflecting the Company's performance in the above regions, net sales in the reportable segment "Japan" totaled ¥76,896 million, a year-on-year increase of ¥886 million. Operating income totaled ¥4,428 million, compared with operating income of ¥5,251 million in the previous fiscal year.

2. North America

The "North America" reportable segment comprises sales posted by the Company's sales subsidiaries in the United States. The Company's performance in this reportable segment was affected by the operating conditions described in the section "(3) Overview of Consolidated Net Sales by Region," above. As a result, net sales in this reportable segment totaled ¥11,692 million, a year-on-year increase of ¥3,643 million. Operating income totaled ¥758 million, compared with operating income of ¥230 million in the previous fiscal year.

3. Europe

The "Europe" reportable segment consists of sales recorded by the Company's sales subsidiaries in Europe, those recorded by a subsidiary that manufactures and markets package printing presses (also in Europe), and those recorded by a corporate group based in the region that manufactures and sells post-press machinery. As a result of the factors explained in section (3) above, net sales in this reportable segment totaled ¥23,376 million,

• year-on-yearincrease of ¥101 million. Operating loss totaled ¥168 million, in contrast with an operating income of ¥370 million in the previous fiscal year.

4. Greater China

The "Greater China" reportable segment consists of sales recorded by the Company's sales subsidiaries in Hong Kong, Shenzhen (China) and Taiwan as well as those recorded by its printing machinery production and sales subsidiary in Nantong, China. As a result of the factors explained in section (3) above, net sales in this reportable segment totaled ¥16,527 million, a year-on-year increase of ¥1,321 million. Operating loss totaled ¥230 million, compared with operating loss of ¥32 million in the previous fiscal year.

(English translation of "KESSAN TANSHIN" originally issued in Japanese.)

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5. Others

"Others" includes sales recorded by the Company's sales subsidiaries in India, Singapore and Malaysia. Subject to the operating conditions mentioned above in "Other Regions," net sales in this reportable segment totaled ¥4,501 million, a year-on-year increase of ¥926 million. Operating income amounted to ¥319 million, compared with ¥302 million in the previous fiscal year.

(5) Highlights

In the fiscal year ended March 31, 2024, Group highlights were as follows:

In the mainstay offset printing press business, Komori released LITHRONE E37 and LITHRONE E37P in January 2024. The former is designed to save energy and is capable of achieving superior cost performance, while the latter boasts a sheet-reversing function. As these models operate with a fewer number of rollers, users can expect to cut back on energy consumption as well as maintenance costs, time and processes, helping to reduce the burden placed on operators.

In the field of security printing presses, the Company opened Komori Global Center-Security(KGC-S) in October 2023 within the premises of the Tsukuba Plant (Tsukuba City, Ibaraki Prefecture). Based on concepts of "Power to the Print" and "Trust in Print," the KGC-S offers cutting-edge facilities backed by security printing technologies cultivated by the Komori Group for more than 65 years. Komori aims to utilize these facilities to invite government officials and printing company representatives-who are its customers in the banknote and high-end security printing field-as well as relevant suppliers, to observe printing demonstration, take part in training and join collaborative R&D activities. In this way, Komori will work together with customers and suppliers to help enhance the reliability of banknote and high-end security printing.

In the printed electronics (PE) field, the Company established the Printed Electronics Elemental Technology Development Center (PEDEC) in October 2023 to promote the development of elemental technologies. The Komori Group has positioned the PE business as a growth business. Accordingly, PEDEC is aimed at enabling Komori to establish its technological competitiveness through the upgrading of its platform for the development of elemental technologies so that the Company remains aligned with rapid advancements taking place in the electronics industry. PEDEC boasts diverse analysis equipment and, therefore, is capable of conducting development aimed at applying cutting-edge printing technologies to electronics manufacturing. In addition to advancing elemental technologies of its own, Komori will fully take advantage of PEDEC to promote joint development with partner companies, as well as open innovation involving industry-academia collaboration, with the aim of pursuing the possibilities of PE technologies.

(English translation of "KESSAN TANSHIN" originally issued in Japanese.)

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(2) Financial Condition

Assets, Liabilities and Net Assets

Total assets as of March 31, 2024 stood at ¥167,588 million, an increase of ¥2,065 million compared with the previous fiscal year-end. Total liabilities were ¥53,121 million, a decrease of ¥5,268 million, while net assets totaled ¥114,467 million, an increase of ¥7,334 million.

Key positive factors leading to the increase in total assets included a ¥7,346 million net increase in investment securities, a ¥4,527 million increase in inventories and a ¥2,468 million increase in notes and accounts receivable-trade, and contract assets. Key negative factors affecting total assets included a ¥7,853 million decrease in cash and deposits, a ¥4,894 million net decrease in securities and a ¥1,765 million decrease in goodwill.

The primary factors that decreased total liabilities included a ¥5,360 million decrease in electronically recorded obligations-operating and a ¥753 million decrease in contract liabilities. The primary factors leading to the increase in total liabilities included a ¥1,887 million increase in deferred tax liabilities and ¥484 million increase in current liabilities- other.

Key positive factors affecting net assets included a ¥4,875 million increase in valuation difference on investment securities, a ¥1,540 million increase in foreign currency translation adjustment, a ¥889 million increase in remeasurements of defined benefit plans and a ¥739 million increase in retained earnings. Key negative factors affecting net assets included a ¥502 million decrease in capital surplus.

(3) Fiscal 2024 Consolidated Cash Flows

(In millions of yen)

	Net cash	Net cash
	provided by	provided by
	(used in)	(used in)
	operating	investing
	activities	activities
Fiscal year ended	(8,051)	483
March 31, 2024
Fiscal year ended	4,475	(526)
March 31, 2023
Increase /	(12,527)	1,009
(Decrease)

Net cash

provided by

(used in) financing activities

(4,874)

(4,077)

(796)

Cash and cash equivalents at end of period

49,664

60,945

(11,281)

Net cash used in operating activities in the fiscal year ended March 31, 2024 amounted to ¥8,051 million, a negative turnaround of ¥12,527 million from net cash provided by operating activities of ¥4,475 million in the previous fiscal year. Principal cash outflows included a ¥6,760 million decrease in notes and accounts payable-trade, a ¥5,635

(English translation of "KESSAN TANSHIN" originally issued in Japanese.)

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