Maxell : Summary of Consolidated Financial Results for the First Quarter ended June 30, 2022

Summary of Consolidated Financial Results for the First Quarter ended June 30, 2022

(Japan GAAP)

			July 27, 2022
Listed company:	Maxell, Ltd.	Stock exchange: Tokyo (Prime Market)
Code number:	6810	URL: https://www2.maxell.co.jp/ir/
Representative:	Keiji Nakamura (President)
Contact person:	Seiji Takahashi (General Manager)
Planned date of submittal of	August 8, 2022	Planned date of beginning	-
financial statement report	payment of dividends

(Figures are rounded off to the nearest 1 million yen)

1. Consolidated Business Results and Financial Position for the First Quarter ended June 30, 2022 (April 1, 2022 through June 30, 2022)

(1) Consolidated Operating Results			(% change compared with the same term of the previous year)
		Net sales	Operating profit	Ordinary profit	Profit attributable to
		owners of parent
		Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
	June 30, 2022	32,227	(7.7)	1,286	(64.0)	1,934	(48.0)	1,645	(37.9)
	June 30, 2021	34,930	16.6	3,576	-	3,721	-	2,651	-
Note:	Comprehensive income: June 30, 2022	5,590 millions of yen (103.9%)
		June 30, 2021	2,741 millions of yen ( - %)
		Net profit			Net profit
				per share
		per share
				(Diluted)
			Yen		Yen
	June 30, 2022	33.43		―
	June 30, 2021	53.60		―

Note: The Company has introduced "performance-linkedshare-based remuneration system". And the shares of the Company held by the trust are included in the treasury shares deducted in the calculation of the average number of the shares during the term used in the calculation of "Net profit per share" of the quarter.

(2) Consolidated Financial Position
	Total assets	Net assets	Shareholders' equity
	ratio
		Millions of yen	Millions of yen	％
June 30, 2022		180,275	87,978	47.0
March 31, 2022		177,535	84,616	45.9
References: Shareholders' equity: June 30, 2022	84,705 millions of yen; March 31, 2022	81,498 millions of yen

Note: The Company has introduced "performance-linkedshare-based remuneration system". And the shares of the Company held by the trust are recorded as treasury shares.

2. Dividend

				Dividend per share
	1Q		2Q	3Q	Year end	Full year
		Yen	Yen	Yen	Yen	Yen
March 31, 2022		-	20.00	-		20.00	40.00
March 31, 2023		-
March 31, 2023			20.00	-		20.00	40.00
(Forecast)
Note : Revision of the latest dividend forecast:		None

1

3. Consolidated Business Forecast for the year ending March 31, 2023 (April 1, 2022 through March 31, 2023)

(% change from the previous year)

	Net sales		Operating profit	Profit attributable		Net profit
		to owners of parent		per share
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	130,000	(5.9)	9,500	1.8	6,000	-	121.92
Note 1: Revision of the latest consolidated financial forecast:	None

1. The Company has introduced "performance-linkedshare-based remuneration system". And the shares of the Company held by the trust are included in the treasury shares deducted in the calculation of the average number of the shares during the term used in the calculation of "Net profit per share" of the year.

Notes

(1) Changes in significant subsidiaries during the period:	None
(2) Application of special accounting method:	Yes
Standard used to calculate income taxes

Tax expenses are calculated by making a reasonable estimation of the effective tax rate on profit before income taxes for the fiscal year including the first quarter after the application of deferred tax accounting and applying the estimated effective tax rate to the quarterly profit before income taxes. However, when an estimated effective tax rate is unreasonable, the effective statutory tax rate shall be applied.

(3) Changes in accounting policies, accounting estimates and restatement

1)	Changes as a result of revision of accounting standards:	None
2)	Changes other than 1):	None
3)	Changes in accounting estimates:	None
4)	Restatement:	None

1. Number of shares issued (common stock)
2. 1. Number of shares issued at end of period (including treasury share):

	June 30, 2022	53,341,500 shares
	March 31, 2022	53,341,500 shares
2)	Number of shares of treasury share at end of period:
	June 30, 2022	4,798,395 shares
	March 31, 2022	3,882,195 shares
3)	Average number of shares during the term:
	June 30, 2022	49,213,263 shares
	June 30, 2021	49,459,334 shares

Note 1: The number of shares of treasury share at end of period includes the shares of the Company held by the trust relating to "performance-linkedshare-based remuneration system" (18,600 shares, for the previous consolidated fiscal year ended March 31, 2022 and 18,600 shares, for the First Quarter ended June 30, 2022).

• 1. The average number of shares during the term is calculated by deducting the treasury shares and the shares of the Company held by the trust relating to "performance-linkedshare-based remuneration system" (18,600 shares, for the First Quarter ended June 30, 2021 and 18,600 shares, for the First Quarter ended June 30, 2022).
• Explanation regarding the appropriate use of forecasts of business results and other special instructionsForecasts of business results and other forward-lookingstatements in this document are based on information currently

available to the Company and certain assumptions that the Company deems to be reasonable. Actual business results may differ significantly due to a variety of factors. For further information on the above-mentioned forecast preconditions and other related matters, please see page 4, "3. Qualitative Information relating to Projections of Consolidated Business Results".

2

[Qualitative Information / Financial Statements]

1. Qualitative Information relating to Consolidated Business Results

(Unless otherwise stated, all comparisons are with operating results in first quarter of the previous fiscal year, from April 1, 2021 to June 30, 2021.)

Looking at the global economy in this first quarter period, there was a worldwide shift to the policy to coexist with the Novel Coronavirus (COVID-19), which led to a recovery in flow of people in both the business and tourism sectors. On the other hand, it was impacted worldwide by a logistical stagnation caused by lockdown in Shanghai, China, where the zero-COVID-19 policy is being implemented. In addition, despite the gradual recovery in automotive and semiconductor related demands, prolonged Russia-Ukraine crisis is causing further hikes in raw material and energy costs, and making its situation unpredictable.

Under these circumstances, sales of this first quarter period decreased by 7.7% (2,703 million yen) to 32,227 million yen due to the decrease in sales of rechargeable batteries and BtoC products, as well as the significant decrease in sales of projectors due to the planned downsizing of the business, whereas the sales of products for automotive and semiconductor related markets increased. In terms of profitability, operating profit decreased by 64.0% (2,290 million yen) to 1,286 million yen, ordinary profit decreased by 48.0% (1,787 million yen) to 1,934 million yen and profit attributable to owners of parent decreased by 37.9% (1,006 million yen) to 1,645 million yen due to the sales decrease of rechargeable batteries and BtoC products, as well as the time lag between soaring raw material costs and revision of selling prices corresponding to the cost increase.

The average foreign exchange rate over this first quarter under review was US$1=130 yen.

Energy

Sales of primary batteries mainly for in-car use increased due to recovery of automotive related demand. However, sales of rechargeable batteries decreased caused by production decrease at the customers. As a result, sales of Energy segment decreased by 11.8% (1,183 million yen) to 8,810 million yen. In terms of profitability, operating profit decreased by 76.5% (1,024 million yen) to 314 million yen due to the impact of sales decrease of rechargeable batteries and the impact of soaring raw material costs in battery products in general.

Functional Materials

As sales of both adhesive tapes and industrial materials increased, overall sales of Functional Materials segment increased by 8.8% (592 million yen) to 7,305 million yen. On the other hand, operating profit decreased by 61.5% (412 million yen) to 258 million yen due to the impact of time lag between soaring raw material costs and the revision of selling prices.

Optics & Systems

Recovery in automotive and semiconductor related demands led to higher sales of both in-car optical components and semiconductor related products. However, due to significant impact by the downsizing of the projector business, sales of Optics & Systems segment decreased by 11.8% (1,208 million yen) to 9,005 million yen. Operating profit decreased by 22.7% (248 million yen) to 843 million yen due to sales decrease of projector, although profit of in-car optical components increased.

Life Solution

Sales of BtoC products decreased due to the factors such as the saturation of health and hygiene related demand. As a result, sales of Life Solution segment decreased by 11.3% (904 million yen) to 7,107 million yen. Operating profit decreased by 606 million yen to loss of 129 million yen due to sales decrease of BtoC products.

For the information on sales by region, capital expenditure, depreciation, and research and development expenses, please see the supplementary information on page 5.

3

2. Qualitative Information relating to Consolidated Financial Position

Assets

As of June 30, 2022, total assets amounted 180,275 million yen, increased by 1.5% from the previous consolidated fiscal year (as of March 31, 2022). Among this, current assets amounted 101,902 million yen, increased by 2.4%, mainly by increase of inventories, and the ratio of current assets among total assets has changed to 56.5% from 56.0% of the previous consolidated fiscal year. On the other hand, non-current assets amounted 78,373 million yen, increased by 0.4%, and the ratio of non-current assets among total assets has changed to 43.5% from 44.0% of the previous consolidated fiscal year.

Liabilities

As of June 30, 2022, total liabilities amounted 92,297 million yen, decreased by 0.7% from the previous consolidated fiscal year. Among this, current liabilities amounted 63,807 million yen, increased by 10.5%, mainly by increase of current portion of long-term borrowings. Current ratio became 1.6 times, and the cash on hand which is the balance between current assets and current liabilities, became 38,095 million yen. On the other hand, non-current liabilities amounted 28,490 million yen, decreased by 19.1%, mainly by decrease of long-term borrowings.

Net Assets

As of June 30, 2022, total net assets amounted 87,978 million yen, increased by 4.0% from the previous consolidated fiscal year, mainly by increase of foreign currency translation adjustment amounted 3,674 million yen and record of profit attributable to owners of parent amounted 1,645 million yen. And the equity ratio has changed to 47.0% from 45.9% of the previous consolidated fiscal year.

3. Qualitative Information relating to Projections of Consolidated Business Results

As for the business performance in this first quarter period, sales decreased in comparison with the same period of last year. Whereas the sales of products for automotive and semiconductor markets were favorable, there were sales decrease of projector due to the downsizing of its business and sales decrease of rechargeable batteries due to production decrease at the customers. However, these sales decrease had been included in our previous projection and overall sales results were generally within expected level. In addition, while BtoC products continue to struggle, the Company is planning to gradually introduce competitive and differentiated products in this fiscal year, and will work to recover from current situation. As for operating profit, the decrease for projector and rechargeable batteries were within expectations, and in response to rising raw material costs, which are increasing more than expected, the Company will work to recover by reflecting them in sales prices, although there will be a time lag.

The Company will promote business portfolio reforms by concentrating management resources on businesses that need to be expanded and strengthen the response to cost increase, to the rising raw material cost in particular. The Company will continue to strengthen the profitability to realize our full-year consolidated earnings forecast for the fiscal year ending March 2023, which was announced on May 13, 2022.

4

Supplementary information

Consolidated Financial Results and Forecast

										(Millions	of yen)
		First Quarter ended:	First Quarter ended:		Change*	March 31, 2023		Change*
		June 30, 2021	June 30, 2022		(%)	Forecast		(%)
	Net sales	34,930		32,227		(7.7)		130,000			(5.9)
	Operating income	3,576		1,286		(64.0)		9,500			1.8
	Profit attributable to	2,651		1,645		(37.9)		6,000			-
	owners of parent
* % change from the same term of the previous year
Sales and Operating Income by Segment
		June 30, 2021		June 30, 2022		March 31, 2023
			Change*	Forecast	Change*
		Millions of yen		Millions of	Composition	(%)	Millions of		Composition		(%)
			yen	(%)			yen		(%)
	Net sales	34,930		32,227	100.0	(7.7)	130,000		100.0		(5.9)
	Energy	9,993		8,810	27.3	(11.8)	35,000		26.9		(9.4)
	Functional Materials	6,713		7,305	22.7	8.8	28,700		22.1		2.4
	Optics & Systems	10,213		9,005	27.9	(11.8)	34,800		26.8		(12.0)
	Life Solution	8,011		7,107	22.1	(11.3)	31,500		24.2		(1.6)
	Operating income	3,576		1,286	100.0	(64.0)	9,500		100.0		1.8
	Energy	1,338		314	24.4	(76.5)	1,900		20.0		(53.1)
	Functional Materials	670		258	20.1	(61.5)	2,700		28.4		45.1
	Optics & Systems	1,091		843	65.6	(22.7)	3,800		40.0		13.8
	Life Solution	477		(129)	-	-	1,100		11.6		-
* % change from the same term of the previous year
Sales by Regional Segment
		June 30, 2021		June 30, 2022	Change*
		Millions of yen		Millions of	Composition	(%)
			yen	(%)
	Overseas sales	14,976		13,363	41.5	(10.8)
	America	3,806		3,136	9.7	(17.6)
	Europe	2,837		2,577	8.0	(9.2)
	Asia and other	8,333		7,650	23.8	(8.2)
	Domestic sales	19,954		18,864	58.5	(5.5)
	Total	34,930		32,227	100.0	(7.7)
* % change from the same term of the previous year
Capital investment, Depreciation, R&D expenses						(Millions	of yen)
		June 30, 2021		June 30, 2022		Change*	March 31, 2023	Change*
				(%)	Forecast		(%)
	Capital investment	427			829		94.1		7,000		76.8
	Depreciation	1,093			1,157		5.9		5,000		10.1
	R&D expenses	1,501			1,586		5.7		7,000		9.7

* % change from the same term of the previous year

5