Kubota : Results of operations for the year ended December 31, 2021 (0.3MB)

FOR IMMEDIATE RELEASE	February 14, 2022

Contact: IR Section

Corporate Planning and Control Dept.

2-47, Shikitsuhigashi 1-chome,

Naniwa-ku, Osaka 556-8601, Japan

Phone: [phone]

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2021 [IFRS]

Kubota Corporation hereby reports its consolidated results for the year ended December 31, 2021.

Consolidated Financial Highlights

1. Consolidated financial highlights for the year ended December 31, 2021

(1) Consolidated results of operations	(Unit: millions of yen, except earnings per share)
	Year ended		Change	Year ended		Change
	Dec. 31, 2021		[%]	Dec. 31, 2020		[%]
Revenue	¥ 2,196,766		18.5	¥ 1,853,234		(3.5)
Operating profit	¥ 246,207		40.5	¥ 175,284		(13.1)
% of revenue	11.2%			9.5%
Profit before income taxes	¥ 252,559		35.9	¥ 185,899		(11.1)
% of revenue	11.5%			10.0%
Profit for the year	¥ 190,732		34.9	¥ 141,400		(11.1)
% of revenue	8.7%			7.6%
Profit attributable to owners of the parent	¥ 175,637		36.7	¥ 128,524		(13.8)
% of revenue	8.0%			6.9%
Comprehensive income for the year	¥ 285,639		171.1	¥ 105,349		(41.9)
% of revenue	13.0%			5.7%
Earnings per share attributable to owners of the parent:
Basic	¥ 145.52			¥ 105.85
Diluted	-			-
Ratio of profit attributable to owners of the parent
to equity attributable to owners of the parent	11.1%			8.8%
Ratio of profit before income taxes to total assets	7.3%			5.9%
(2) Consolidated financial position	(Unit: millions of yen, except earnings per share)
	Dec. 31, 2021	Dec. 31, 2020
Total assets	¥ 3,773,510			¥ 3,189,317
Total equity	¥ 1,784,973			¥ 1,574,185
Equity attributable to owners of the parent	¥ 1,677,957			¥ 1,476,039
Ratio of equity attributable to owners of the parent
to total assets	44.5%			46.3%
Equity attributable to owners of the parent per share	¥ 1,398.41			¥ 1,221.95
(3) Consolidated cash flows				(Unit: millions of yen)
	Year ended		Year ended
	Dec. 31, 2021	Dec. 31, 2020
Net cash provided by operating activities	¥ 92,511			¥ 142,919
Net cash used in investing activities	( ¥ 127,370)			( ¥ 47,133)
Net cash provided by (used in) financing activities	¥ 60,586			( ¥ 68,354)
Cash and cash equivalents, at the end of the year	¥ 258,639			¥ 222,919

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Kubota Corporation

and Its Subsidiaries

Notes:

1. Change [%] represents the percentage change from the prior year.
2. Share of profits of investments accounted for using the equity method for the year ended December 31, 2021 and 2020 was ¥3,042 million and ¥2,528 million, respectively.
3. Amounts less than one million yen are rounded.

2. Cash dividends

(Unit: millions of yen, except per share amounts)

		Cash dividends per share				Ratio of
						Annual	Payout	dividends
	First	Second	Third			to equity
	quarter	quarter	quarter	Year-end	Total	cash dividends	ratio	attributable to
	period	period	period					owners of the
					parent
Year ended Dec. 31, 2021	－	¥ 21.00	－	¥ 21.00	¥ 42.00	¥ 50,581	28.9%	3.2%
Year ended Dec. 31, 2020	－	¥ 17.00	－	¥ 19.00	¥ 36.00	¥ 43,625	34.0%	3.0%

Note:

Although Kubota Corporation's basic policy for the return of profit to shareholders is to maintain stable dividends and raise dividends, the specific amount of cash dividends for each fiscal year is decided in consideration of the development of business performance, financial condition, and shareholder return ratio calculated from dividends and retirement of its own shares.

3. Forecasts of operations for the year ending December 31, 2022

(Unit: millions of yen, except per share amounts)

	Six months ending	Change	Year ending	Change
	June 30, 2022	[%]	Dec. 31, 2022	[%]
Revenue	¥ 1,220,000	10.8	¥ 2,450,000	11.5
Operating profit	¥ 120,000	(18.7)	¥ 250,000	1.5
Profit before income taxes	¥ 121,000	(19.0)	¥ 253,000	0.2
Profit attributable to owners of the parent	¥ 85,000	(17.4)	¥ 178,000	1.3
Earnings per share attributable to owners of the parent - basic	¥ 70.84		¥ 148.34

Notes:

1. Change [%] represents the percentage change from the prior year.
2. Please refer to the accompanying materials, "1. Review of operations and financial condition (1) Review of operations
   c) Forecasts for the year ending December 31, 2022" on page 6 for further information related to the forecasts of operations.

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Kubota Corporation

and Its Subsidiaries

4. Other information

1. Changes in significant subsidiaries during the year (changes in specified subsidiaries resulting in the changes in scope of consolidation): None
2. Changes in accounting policies and changes in accounting estimates
3. 1. Changes in accounting policies required by International Financial Reporting Standards (hereinafter "IFRS"): None
   2. Changes in accounting policies due to reasons other than a) above: None
   3. Changes in accounting estimates: None
4. Number of common shares issued

a) Number of common shares issued including treasury shares as of December 31, 2021	:	1,200,246,846
Number of common shares issued including treasury shares as of December 31, 2020	:	1,208,576,846
b) Number of treasury shares as of December 31, 2021	:	339,469
Number of treasury shares as of December 31, 2020	:	643,937
c) Weighted-average number of common shares outstanding during the year ended December 31, 2021	:	1,206,930,248
Weighted-average number of common shares outstanding during the year ended December 31, 2020	:	1,214,174,244
Note:
Please refer to the accompanying materials "3. Consolidated financial statements (9) Per common share information" on page 18.

(Reference) Non consolidated financial highlights

(1) Results of operations	(Unit: millions of yen, except per common share amounts)
	Year ended		Change	Year ended		Change
	Dec. 31, 2021		[%]	Dec. 31, 2020		[%]
Net sales	¥ 1,075,018		24.2	¥ 865,585		(3.6)
Operating income	¥ 52,136		371.9	¥ 11,048		(56.1)
Ordinary income	¥ 118,521		120.4	¥ 53,785		(5.7)
Net income	¥ 95,638		38.5	¥ 69,043		18.5
Net income per common share
Basic	¥ 79.21			¥ 56.84
Diluted	-			-
(2) Financial position	(Unit: millions of yen, except per common share amounts)
	Dec. 31, 2021	Dec. 31, 2020
Total assets	¥ 1,416,740	¥ 1,238,811
Net assets	¥ 645,981	¥ 609,747
Ratio of equity to total assets		45.6%		49.2%
Net assets per common share		¥ 538.20		¥ 504.64

Note:

Amounts are rounded down to the nearest million yen.

(Information on the status of the audit by the independent auditor) This release is not subject to the audit by the independent auditor.

(Method of obtaining supplementary materials on the financial results)

Kubota Corporation plans to hold a result briefing for institutional investors and securities analysts on February 18, 2022. The supplementary material will be published on its website on the same day.

< Cautionary statements with respect to forward-looking statements >

This document may contain forward-looking statements that are based on management's expectations, estimates, projections, and assumptions. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results may differ materially from what is forecast in forward-looking statements due to a variety of factors, including, without limitation: general economic conditions in the Company's markets, particularly government agricultural policies, levels of capital expenditures both in public and private sectors, foreign currency exchange rates, occurrence of natural disasters, continued competitive pricing pressures in the marketplace, as well as the Company's ability to continue to gain acceptance of its products.

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Kubota Corporation

and Its Subsidiaries

Index to Accompanying Materials

1. Review of operations and financial condition ………………………………………………………………………………………… 5

1. Review of operations ……………………………………………………………………………………………………………………. 5
2. Financial condition ……………………………………………………………………………………………………………………..... 7

2. Basic rationale for selection of accounting standards ……………………………………………………………………………	8
3. Consolidated financial statements …………………………………………………………………………………………………………	9
(1)	Consolidated statement of financial position …………………………………………………………………………………	9
(2)	Consolidated statement of profit or loss …………………………………………………………………………………………	11
(3)	Consolidated statement of comprehensive income ………………………………………………………………………	12
(4)	Consolidated statement of changes in equity …………………………………………………………………………………	13
(5)	Consolidated statement of cash flows ……………………………………………………………………………………………	14
(6)	Notes to the going concern assumption …………………………………………………………………………………………	15
(7)	Notes to consolidated financial statements ……………………………………………………………………………………	15
(8)	Consolidated segment information …………………………………………………………………………………………………	16
(9)	Per common share information ………………………………………………………………………………………………………	18
(10) Subsequent events ……………………………………………………………………………………………………………………....	18
(11)	Consolidated revenue by product group …………………………………………………………………………………………	19
(12)	Anticipated consolidated revenue by reportable segment ……………………………………………………………	20
4. Results of operations for the three months ended December 31, 2021 …………………………………………………	21
(1)	Condensed consolidated statement of profit or loss ………………………………………………………………………	21
(2)	Consolidated segment information …………………………………………………………………………………………………	22
(3)	Consolidated revenue by product group …………………………………………………………………………………………	23

5. Other …………………………………………………………………………………………………………………….................................. 24

(1) Change of management (Effective as of March 18, 2022) ……………………………………………………………… 24

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Kubota Corporation

and Its Subsidiaries

1. Review of operations and financial condition

(1) Review of operations

1. Summary of the results of operations for the year ended December 31, 2021

For the year ended December 31, 2021, revenue of Kubota Corporation and its subsidiaries (hereinafter, the "Company") increased by ¥343.5 billion [18.5%] from the prior year to ¥2,196.8 billion.

Domestic revenue increased by ¥7.6 billion [1.3%] from the prior year to ¥602.8 billion because of increased revenue in Farm & Industrial Machinery mainly due to increased sales of farm equipment, despite a decrease in revenue in Water & Environment and Other.

Overseas revenue increased by ¥335.9 billion [26.7%] from the prior year to ¥1,594.0 billion because of significantly increased revenue of farm equipment and construction machinery, while revenue in Water & Environment decreased from the prior year. As a result, overseas revenue accounted for 72.6% of consolidated revenue, which increased by 4.7 percentage points from the prior year.

Operating profit increased by ¥70.9 billion [40.5%] from the prior year to ¥246.2 billion mainly due to significantly increased revenue in the domestic and overseas markets and favorable impact of foreign exchange rates, while there were some negative effects from soaring material prices and logistics expenses. Profit before income taxes increased by ¥66.7 billion [35.9%] from the prior year to ¥252.6 billion due to increased operating profit. Income tax expenses were ¥64.9 billion. Share of profits of investments accounted for using the equity method was ¥3.0 billion. Profit for the year increased by ¥49.3 billion [34.9%] from the prior year to ¥190.7 billion. Profit attributable to owners of the parent increased by ¥47.1 billion [36.7%] from the prior year to ¥175.6 billion.

1. Review of operations by reportable segment

1) Farm & Industrial Machinery

Farm & Industrial Machinery is composed of farm equipment, agricultural-related products, engines, and construction machinery.

Revenue in this segment increased by 23.6% from the prior year to ¥1,864.8 billion and accounted for 84.9% of consolidated revenue.

Domestic revenue increased by 6.0% from the prior year to ¥310.5 billion. Sales of farm equipment and agricultural-related products increased due to a recovery from adverse reaction from rushed demand before the consumption tax hike and increased demand resulting from subsidies for business continuation of farmers.

Overseas revenue increased by 27.8% from the prior year to ¥1,554.3 billion. In North America, sales of tractors and construction machinery increased significantly due to strong demand along with trend in move to suburbs despite continued delay in procurement caused by disrupted supply chains. In Europe, sales of construction machinery, tractors, and engines increased due to continued recovery trend from sluggish sales along with the infection spread of COVID-19 in the prior year. In Asia outside Japan, sales of farm equipment in Thailand increased significantly mainly due to favorable weather conditions and strong market of dryland farming supported by stable high crop prices. In addition, sales of farm equipment in India were strong as well. In Other areas, sales of tractors and construction machinery in Australia increased significantly due to government stimulus policies.

Operating profit in this segment increased by 39.1% from the prior year to ¥250.4 billion due to significantly increased revenue in the domestic and overseas markets, raised product price, and favorable impact of foreign exchange rates, while there were a negative effect from soaring material prices and logistics expenses.

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