Makita : Q1 Financial Results

Makita Corporation

Consolidated Financial Results

for the three months

ended June 30, 2022

(IFRS Financial Information)

(English translation of "KESSAN TANSHIN"

originally issued in Japanese)

CONSOLIDATED FINANCIAL RESULTS

FOR THE THREE MONTHS ENDED JUNE 30, 2022 (Unaudited)

July 26, 2022

Makita Corporation

Stock code: 6586

URL: https://www.makita.biz/

Munetoshi Goto, President, Representative Director

1. Summary operating results of the three months ended June 30, 2022 (From April 1, 2022 to June 30, 2022)

(1) CONSOLIDATED OPERATING RESULTS

		Yen (millions)
	For the three months ended		For the three months ended
	June 30, 2021		June 30, 2022
		(%)			(%)
................................................................Revenue	185,297	45.9		195,348	5.4
....................................................Operating profit	28,382	82.3		15,228	(46.3)
Profit before income taxes ....................................	29,865	81.3		15,719	(47.4)
Profit .....................................................................	21,816	86.7		10,436	(52.2)
Profit attributable to owners of the parent ............	21,612	87.6		10,563	(51.1)
Comprehensive income ........................................	29,461	85.2		56,425	91.5
Profit attributable to			Yen
Owners of the parent per share
(Basic)..................................................................	79.59		38.90
(Diluted) ..............................................................	-		-

Notes:

1. Amounts of less than one million yen have been rounded.
2. The table above shows the changes in the percentage ratio of revenue, operating profit, profit before income taxes, profit, profit attributable to owners of the parent, and comprehensive income against the corresponding period of the previous year.

1. SELECTED CONSOLIDATED FINANCIAL POSITION

	Yen (millions)
	As of March 31, 2022		As of June 30, 2022
Total assets............................................................	1,007,497		1,112,111
Total equity ...........................................................	752,530		792,128
Equity attributable to owners of the parent...........	746,344		785,740
Ratio of equity attributable to owners of the	74.1%		70.7%
parent to total assets (%).......................................

Note: Amounts of less than one million yen have been rounded.

2. Dividend Information

		Yen
	For the year ended	For the year ending
	March 31, 2022	March 31, 2023
		(Forecast)
Cash dividend per share:
Interim.................................................................	10.00	10.00
Year-end ..............................................................	62.00	(Note)
Total ....................................................................	72.00	(Note)

Notes:

1. The forecast for cash dividend announced on April 27, 2022 has not been revised.
2. The projected amount of dividends for the year ending March 31, 2023 has not been determined yet. For further details, refer to "Explanation regarding proper use of business forecast, and other significant matters" on page 2.

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English translation of "KESSAN TANSHIN" originally issued in Japanese

3. Consolidated Financial Forecast for the year ending March 31, 2023 (From April 1, 2022 to March 31, 2023) Yen (millions)

	For the year ending
	March 31, 2023
		(%)
Revenue.............................................................................................	740,000	0.1
Operating profit .................................................................................	85,000	(7.3)
Profit before income taxes.................................................................	83,000	(10.3)
Profit attributable to owners of the parent.........................................	59,000	(8.9)
	Yen
Profit attributable to
Owners of the parent per share(Basic) ..............................................	217.29

Notes:

1. Changes of the forecasts from the most recent disclosure: No
2. The table above shows the changes in the percentage ratio of revenue, operating profit, profit before income taxes and profit attributable to owners of the parent against the previous year.

4. Other

1. Changes in important subsidiaries during the period (Changes in specified subsidiaries accompanied by changes in scope of consolidation during the quarter): None
2. Changes in accounting policies and accounting estimates:
3. 1. Changes in accounting policies required by IFRS: None
   2. Changes in accounting policies other than 1: None
   3. Changes in accounting estimate: None
4. Number of shares outstanding (common stock)

1.	Number of shares issued (including treasury stock):	As of June 30, 2022:	280,017,520
		As of March 31, 2022:	280,017,520
2.	Number of treasury stock:	As of June 30, 2022:	8,485,289
		As of March 31, 2022:	8,485,061
3. Average number of shares outstanding:	For the three months ended June 30, 2022:	271,532,359
		For the three months ended June 30, 2021:	271,526,825

This consolidated financial report is not subject to audit procedures by certified public accountants or an auditing firm.

Explanation regarding proper use of business forecasts, and other significant matters

1. The financial forecast given above is based on information as available at the present time, and includes potential risks and uncertainties. As a consequence of the factors above and other, actual results may vary from the forecasts

provided above. Regarding the assumptions for the forecasts and other matters, refer to "SUPPLEMENT INFORMATION (CONSOLIDATED)", "1. Overview of operating results", "(3) Outlook for the fiscal year ending March 31, 2023" on page 3.

2. Makita's basic policy on the distribution of profits is to maintain a consolidated dividend payout ratio of 30% or greater, with a lower limit on annual cash dividends of 10 yen per share. However, in the event special circumstances arise, computation of the amount of dividends will be based on profit attributable to owners of the parent per share after certain adjustments.

The Board of Directors plans to meet in April 2023 for a report on earnings for the year ending March 31, 2023. At the time, in accordance with the basic policy regarding profit distribution mentioned above, the Board of Directors plans to propose a dividend equivalent to at least 30% of profit attributable to owners of the parent. The Board of Directors will submit this proposal to the General Meeting of Shareholders scheduled for June 2023.

The consolidated dividend payout ratio is calculated as annual dividends per share divided by consolidated profit attributable to owners of the parent per share (after adjustments for special circumstances) and multiplied by 100.

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English translation of "KESSAN TANSHIN" originally issued in Japanese

SUPPLEMENT INFORMATION (CONSOLIDATED)

1. Overview of operating results

(1) Overview of operating results of the three month ended June 30, 2022

Looking at the international economic situation during the first quarter of the consolidated fiscal year under review, the outlook remains uncertain due to such factors as the growing tension in Ukraine and the accompanying sharp rise in energy prices and rising prices due to raw material shortages, amid differences between countries regarding their responses to the COVID-19 pandemic.

In the first quarter, our consolidated net revenue increased 5.4% year on year to 195,348 million yen due to strong sales in Japan, Oceania, and Central and South America, as well as the impact of the yen's depreciation against local currencies. In terms of profit, operating profit decreased by 46.3% year on year to 15,228 million yen (an operating profit ratio of 7.8%) due to a worsening cost ratio as a result of the impact of foreign exchange rates, soaring raw material prices and the impact of the temporary suspension of operations at our main plant in China due to the lockdowns, along with increase in Selling, general, administrative and others expense. Profit before income taxes decreased by 47.4% to 15,719 million yen (profit before income taxes ratio: 8.0%) and profit attributable to owners of the parent decreased by 51.1% to 10,563 million yen (ratio of profit attributable to owners of the parent: 5.4%).

Revenue results by region were as follows:

In Japan, sales of both power tools and outdoor power equipment, mainly lithium-ion battery products, increased 4.5% year on year to 31,414 million yen with efforts to expand sales as stay-at-home demand subsided.

In Europe, business confidence dropped due to rising energy and raw material prices, but sales of cordless outdoor power equipment were strong, along with the yen weakening against local currencies, resulting in a 3.1% year on year increase to 94,204 million yen.

In North America, sales to home centers declined due to a slowdown in stay-at-home demand, resulting in a 2.7% year on year decrease to 27,850 million yen.

In Asia, despite the impact of lockdowns in China, the economy is on a recovery track in countries and regions where deregulation is progressing, resulting in a 13.4% year on year increase to 11,592 million yen.

In Central and South America, amid accelerating inflation in each country, we aggressively pursued region and customer-focused sales activities, resulting in a 23.7% year on year increase to 11,977 million yen.

In Oceania, despite negative economic factors such as material shortages and rising raw material prices, sales activities that reliably captured demand for tools at building and construction sites resulted in a 24.2% year on year increase to 14,970 million yen.

In the Middle East and Africa, despite continuing unstable political and economic conditions, sales increased 2.2% year on year to 3,341 million yen on aggressive sales activities with meticulous attention to detail, as well as the depreciation of the yen against local currencies.

(2) Overview of financial situation as of June 30, 2022

Total assets increased 104,614 million yen from the end of the previous fiscal year to 1,112,111 million yen. This increase was mainly due to the rise in "Inventories."

Total liabilities increased 65,016 million yen from the end of the previous fiscal year to 319,983 million yen. This increase was mainly due to the rise in "Borrowings."

Total equity increased 39,598 million yen from the end of the previous fiscal year to 792,128 million yen. This increase was mainly due to the change in exchange differences on translating foreign operations included in "Other components of equity."

(3) Outlook for the fiscal year ending March 31, 2023

There are uncertainties about the business environments surrounding us and developments in exchange markets. Therefore, we have not reviewed the forecast of its consolidated financial performance for the year ending March 31, 2023 announced on April 27, 2022.

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English translation of "KESSAN TANSHIN" originally issued in Japanese

2. Consolidated Financial Statements (Unaudited)

1. Consolidated Statement of Financial Position

Yen (millions)

	As of March 31, 2022	As of June 30, 2022
	Composition ratio	Composition ratio

ASSETS CURRENT ASSETS:

Cash and cash equivalents ................................

Trade and other receivables ..............................

Inventories ........................................................

Other financial assets........................................

Other current assets ..........................................

Total current assets........................................

NON-CURRENT ASSETS:

Property, plant and equipment, at cost..............

Goodwill and intangible assets .........................

Other financial assets........................................

Retirement benefit assets ..................................

Deferred tax assets............................................

Other non-current assets ...................................

Total non-current assets.................................

Total assets ..............................................................

71,057		108,332
117,541		114,950
475,128		523,678
5,281		6,093
15,952		19,653
684,959	68.0%	772,706	69.5%
243,636		258,978
10,085		10,212
41,545		41,751
11,286		11,213
12,238		13,458
3,748		3,793
322,538	32.0%	339,405	30.5%
1,007,497	100.0%	1,112,111	100.0%

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English translation of "KESSAN TANSHIN" originally issued in Japanese