MISUMI : FY2023 2Q Consolidated Financial Results （234KB）

This is an abridged translation of the original document in Japanese and is intended for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the Japanese original shall prevail.

Consolidated Financial Results

for the Six Months Ended September 30, 2023

[Japanese GAAP]

	October 26, 2023
Company name: MISUMI Group Inc.	Stock exchange listing: Tokyo Stock Exchange
Securities Code: 9962	URL: https://www.misumi.co.jp

Representative: Ryusei Ono, Representative Director and President

Contact: Toru Takanami, CFO and Senior Corporate Officer and Representative Corporate Officer, Finance Platform

Phone: [phone]

Scheduled date of filing quarterly securities report: November 2, 2023

Scheduled date of dividend payments: December 5, 2023

Preparation of supplemental explanatory materials: Yes (materials for institutional investors)

Holding of quarterly financial results meeting: Yes (meeting for institutional investors)

(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Results for the Six Months Ended September 30, 2023 (April 1, 2023 to September 30, 2023)

(1) Consolidated Operating Results (Accumulated) (% indicates changes from the previous corresponding period.)

	Net sales		Operating income	Ordinary income	Net income
		attributable to
							owners of parent
Six months ended	Million yen	%	Million yen	%	Million yen	%	Million yen	%
September 30, 2023	180,094	(4.3)	18,515	(31.2)	20,007	(27.3)	14,185	(29.9)
September 30, 2022	188,158	3.2	26,898	(5.6)	27,527	(4.1)	20,240	(2.8)

(Note) Comprehensive income: Six months ended September 30, 2023: ¥31,494 million (17.7)%

Six months ended September 30, 2022: ¥38,260 million 72.2%

Net income per share

Net income per share

(diluted)

Six months ended

Yen

Yen

September 30, 2023

50.18

50.05

September 30, 2022

71.18

70.98

(2) Consolidated Financial Position

Total assets

Net assets

Equity ratio

Million yen

Million yen

%

As of September 30, 2023

392,813

332,914

83.9

As of March 31, 2023

378,458

314,224

82.3

(Reference) Shareholders'

equity As of September

30, 2023:

¥329,742

million

As of March 31, 2023:

¥311,286 million

2. Cash Dividends

Cash dividends per share for the fiscal year (yen)

1st

2nd

3rd

Year-end

Total

quarter-end

quarter-end

quarter-end

Yen

Yen

Yen

Yen

Yen

Fiscal year ended March 31, 2023

－

17.80

－

12.34

30.14

Fiscal year ending March 31, 2024

－

12.60

Fiscal year ending March 31, 2024

－

14.50

27.10

(Forecast)

(Note) Revision of the latest forecast for

cash dividends:

Yes

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2024 (April 1, 2023 to March 31, 2024)

(% indicates changes from the previous corresponding period.)

			Operating	Ordinary		Net income	Net income per
	Net sales			attributable to
		income		income		share
					owners of parent
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
Full year	377,000	1.0	42,800	(8.2)	43,600	(8.9)	30,500	(11.0)	108.35

(Note) Revision of the latest financial results forecasts: None

*Notes:

1. Changes in significant consolidated subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of consolidation): None
2. Adoption of special accounting procedures for the preparation of quarterly consolidated financial statements: None
3. Changes in accounting policies, changes in accounting estimates and retrospective restatement
4. 1. Changes in accounting policies due to the revision of accounting standards: None
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting estimates: None
   4. Retrospective restatement: None
5. Total number of shares outstanding (common shares)
6. 1. Total number of shares outstanding at the end of the period (including treasury stock):

As of September 30, 2023: 284,733,797 shares

As of March 31, 2023: 284,675,397 shares

• 1. Total number of treasury stock at the end of the period: As of September 30, 2023: 3,196,029 shares
     As of March 31, 2023: 130,070 shares
  2. Weighted average number of shares outstanding during the period: Six months ended September 30, 2023: 282,680,642 shares Six months ended September 30, 2022: 284,364,717 shares
• These quarterly financial results are outside the scope of quarterly review by certified public accountants or audit corporations.
• Explanation on the appropriate use of forecasts and other notes

The earnings forecasts and other forward-looking statements herein are based on information available to the Company at the time of preparation and certain assumptions deemed to be reasonable, and actual results may differ significantly from the forecasts due to various factors. For the assumptions on the earnings forecasts and notes on their use, please refer to "Explanation of Consolidated Financial Results Forecast and Other Forward- looking Statements" on page 3 of the attached document.

Contents of Attachment
1. Qualitative Information on Quarterly Financial Results	2
(1)	Explanation of Operating Results	2
(2)	Explanation of Financial Position	3
(3)	Explanation of Consolidated Financial Results Forecast and Other Forward-looking Statements..	3
2. Quarterly Consolidated Financial Statements and Primary Notes	4
(1)	Quarterly Consolidated Balance Sheet	4
(2)	Quarterly Consolidated Statement of Income and Comprehensive Income	6
(3)	Quarterly Consolidated Statement of Cash Flows	8
(4)	Notes to the Quarterly Consolidated Financial Statements	9
(Notes on going concern assumption)	9
(Notes on significant changes in shareholders' equity)	9
(Changes in accounting policies)	9
(Segment information)	10

1

1. Qualitative Information on Quarterly Financial Results

(1) Explanation of Operating Results

During the first half of this fiscal year, the global economy witnessed sluggish growth in capital investment demand. This was particularly noticeable in the manufacturing industry due to a significant delay in economic recovery within the Chinese market, which was severely impacted by last year's COVID- 19 disaster. Compounding this were the concerns about economic recession in Europe and the Americas. Factors such as rising energy, raw material costs, and exchange rate fluctuations continued to exert pressure. Despite normalization of production within key customer industries like automobiles and semiconductors, there has yet to be a significant rebound in capital investment demand.

In this economic environment, MISUMI Group is leveraging its unique Business MODEL, which encompasses manufacturing and distribution businesses. By advancing the business foundation that supports these businesses globally, we are contributing to industries related to automation demand, particularly the manufacturing industry, by responding to customers' needs for reliable and quick delivery. Utilizing the robust business foundation of IT, production, logistics, and our global network of locations, we have made efforts to capture customer demand accurately. Our new business policies, including developing new products and services aimed at sustainable growth, have progressed primarily according to plan. On the other hand, due to sluggish investment demand, Japan experienced a slight decrease compared to the previous year, while overseas regions saw a decrease in revenue compared to the previous year.

Consequently, due to a slowdown in demand and the impact of exchange rates, our consolidated net sales totaled ¥180,094 million (4.3% decrease year-on-year). In terms of profit, due to decreased sales volume, lower capacity utilization, temporary inventory write-downs, and increased expenses related to implementing a new core IT system to innovate the Business MODEL, operating income was ¥18,515 million (31.2% decrease year-on-year), ordinary income was ¥20,007 million (27.3% decrease year-on- year). Net income attributable to the owners of parent was at ¥14,185 million (29.9% decrease year-over- year).

• Factory Automation (FA) Business

The FA business was able to maintain the same level of sales in Japan as in the previous year, but capital investment demand was generally sluggish in overseas regions, particularly in China, resulting in sales of ¥57,895 million (5.7% decrease year-over-year), and operating income was ¥7,317 million (40.2% decrease year-over-year).

• Die Components Business

The Die Components business is seeing normalization in production for automotive customers, but capital spending remains low. While sales have increased in Asia and Europe, they remain weak in other regions. As a result, sales came to ¥39,329 million (1.4% decrease year-over-year) and operating income was ¥4,301 million (9.1% decrease year-over-year).

• VONA Business

VONA business is MISUMI Group's sales and distribution business of manufacturing / automation- related equipment parts and MRO (Maintenance, Repair, and Operations) products. In addition, this business segment includes MISUMI branded products and third-party manufacturers' products. Although Japan, which accounts for a large share of sales, remained at the previous year's level, the slowdown in demand in China and Asia had a significant impact, resulting in sales of ¥82,868 million (4.6% decrease year-on-year), and operating income was ¥6,896 million (30.5% decrease year-over-year).

2

1. Explanation of Financial Position

1. Assets, liabilities and net assets

Total assets as of the end of the second quarter of the fiscal year were ¥392,813 million, an increase of ¥14,354 million (+3.8%) compared to the previous year-end. This was mainly attributable to an increase of ¥12,489 million (+4.4%) in current assets due to increases in cash and deposits as well as merchandise and finished goods, and an increase of ¥2,240 million (+4.6%) in property, plant and equipment.

Total liabilities amounted to ¥59,899 million, a decrease of ¥4,335 million (-6.7%) compared to the previous year-end. This was mainly attributable to a decrease of ¥4,358 million (-8.9%) in current liabilities due to decreases in notes and accounts payable - trade and accounts payable - other.

Total net assets amounted to ¥332,914 million, an increase of ¥18,690 million (+5.9%) compared to the previous year-end. This was primarily because shareholders' equity increased by ¥1,123 million (+0.4%) due to an increase in retained earnings and treasury stock, and accumulated other comprehensive income including foreign currency translation adjustments increased by ¥17,332 million (+62.8%).

As a result, the equity ratio was 83.9%, compared to 82.3% at the end of the previous year.

1. Cash flows

At the end of the second quarter of the fiscal year, cash and cash equivalents amounted to ¥117,657 million, an increase of ¥11,016 million compared to the previous year-end.

Cash flows from operating activities amounted to a net cash inflow of ¥23,684 million (a net cash inflow of ¥15,055 million for the same period in the previous year). The breakdown is as follows. Income before income taxes was ¥19,914 million. Depreciation and amortization was ¥8,756 million. The amount of decrease in provision for bonuses was ¥941 million. The amount of decrease in notes and accounts receivable - trade was ¥5,831 million. The amount of decrease in notes and accounts payable - trade was ¥3,894 million. Income taxes paid was ¥5,591 million.

Cash flows from investing activities amounted to a net cash outflow of ¥6,488 million (a net cash outflow of ¥5,501 million for the same period in the previous year). The breakdown is as follows. The purchase of fixed assets was ¥7,665 million. Payments into time deposits was ¥9,587 million. Refund from time deposits was ¥10,742 million.

Cash flows from financing activities amounted to a net cash outflow of ¥14,561 million (a net cash outflow of ¥5,164 million for the same period in the previous year). The main items were purchase of treasury stock of ¥10,095 million and dividends paid of ¥3,511 million.

(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Statements

Regarding the consolidated performance forecast for the fiscal year ending March 2024, the performance forecast announced on July 28, 2023, has remained the same. Despite the ongoing uncertainty in our business environment, the Company maintains the previous performance forecast, considering the effects of our unique initiatives and revisions to foreign exchange rates. Please note that if any significant matters that could affect our performance occur due to changes in our business environment in the future, we will promptly disclose them. The forecast for dividends is announced in the press release dated October 26, 2023, titled "Announcing an interim dividend distribution and revision to forecast for year-end dividend."

3

2. Quarterly Consolidated Financial Statements and Primary Notes

(1) Quarterly Consolidated Balance Sheet

				(Millions of yen)
			As of March 31, 2023	As of September 30, 2023
Assets
Current assets
Cash and deposits			119,558			130,181
Notes and accounts receivable - trade	76,359			73,276
Merchandise and finished goods			62,750			64,973
Work in process	4,457			4,494
Raw materials and supplies			10,182			11,081
Other	9,750			11,534
Allowance for doubtful accounts			(436)			(429)
Total current assets			282,623	295,112
Non-current assets
Property, plant and equipment
Buildings and structures, net			14,604			14,556
Machinery, equipment and vehicles, net	15,666			15,876
Land			3,898			3,874
Other, net	14,235			16,337
Total property, plant and equipment			48,405			50,645
Intangible assets
Software			28,125			27,782
Other	6,896			7,146
Total intangible assets			35,021			34,929
Investments and other assets
Investment securities			6			6
Other	12,799			12,528
Allowance for doubtful accounts			(397)			(409)
Total investments and other assets			12,408			12,125
Total non-current assets			95,835			97,700
Total assets			378,458	392,813

4

(Millions of yen)

As of March 31, 2023

As of September 30, 2023

Liabilities

Current liabilities

Notes and accounts payable - trade Accounts payable - other Income taxes payable Provision for bonuses Provision for directors' bonuses Provision for office relocation expenses Other

Total current liabilities

Long-term liabilities

Liability for retirement benefits

Other

Total long-term liabilities

Total liabilities

Net assets

Shareholders' equity

Common stock

Capital surplus

Retained earnings

Treasury stock

Total shareholders' equity

Accumulated other comprehensive income Deferred gain (loss) on hedges Foreign currency translation adjustments Defined retirement benefit plans

22,434	19,356
8,909	7,749
4,276		5,117
3,184	2,405

51－

608－

			9,475	9,953
			48,942	44,583
			7,025	7,318
			8,266		7,996
			15,291	15,315
			64,234		59,899
			13,936	14,003
			24,292		24,326
			245,557	256,231
			(80)		(9,731)
			283,706	284,830
			－	51
			27,508	44,787
			71	72

	Total accumulated other comprehensive income		27,580	44,912
	Stock acquisition rights		1,989	2,138
	Non-controlling interests		948	1,033
	Total net assets		314,224	332,914
	Total liabilities and net assets		378,458	392,813

5

1. Quarterly Consolidated Statement of Income and Comprehensive Income Quarterly Consolidated Statement of Income
   For the Six Months Ended September 30, 2023 and 2022

	(Millions of yen)
For the six months	For the six months
ended September 30, 2022	ended September 30, 2023

Net sales

Cost of sales

Gross profit

Selling, general and administrative expenses Operating income

Non-operating income

Interest income

Subsidy income

Miscellaneous income

Total non-operating income

Non-operating expenses

Interest expenses

Foreign exchange losses

Commission expenses

Miscellaneous loss

Total non-operating expenses

Ordinary income

Extraordinary losses

			188,158	180,094
			101,242	98,972
			86,915	81,122
			60,017	62,606
			26,898	18,515
			488	1,420
			286	289
			193	238
			968	1,948
			98	74
			169	243
			0	96
			70	43
			339	457
			27,527	20,007

	Impairment loss			44	92
	Loss related to COVID-19	91	－
	Total extraordinary losses			135	92
	Income before income taxes		27,391	19,914
	Income taxes			7,095	5,683
	Net income		20,296	14,230
	Net income attributable to non-controlling interests			55	45
	Net income attributable to owners of parent			20,240	14,185

6

Quarterly Consolidated Statement of Comprehensive Income

For the Six Months Ended September 30, 2023 and 2022

			(Millions of yen)
		For the six months	For the six months
		ended September 30, 2022	ended September 30, 2023
Net income		20,296	14,230
Other comprehensive income
Deferred gain (loss) on hedges		(36)	51
Foreign currency translation adjustments	17,985	17,206
Defined retirement benefit plans		2	0
Share of other comprehensive income in associates	12	4
Total other comprehensive income		17,964	17,263
Comprehensive income		38,260	31,494
Comprehensive income attributable to
Owners of parent	38,303	31,517
Non-controlling interests		(43)	(23)

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(3) Quarterly Consolidated Statement of Cash Flows

										(Millions of yen)
					For the six months	For the six months
					ended September 30, 2022	ended September 30, 2023
	Cash flows from operating activities
	Income before income taxes	27,391		19,914
	Depreciation and amortization						7,857			8,756
	Impairment loss	44		92
	Increase (decrease) in liability for retirement benefits						141			252
	Increase (decrease) in provision for bonuses	(2,411)	(941)
	Increase (decrease) in provision for directors' bonuses						(250)			(51)
	Increase (decrease) in allowance for doubtful accounts	(31)	(38)
	Interest and dividend income						(495)			(1,420)
	Interest expenses	98		74
	Share-based compensation expenses						350			361
	Foreign exchange (gains) losses	(50)	45
	Share of (profit) loss of entities accounted for using equity			(24)			(21)
	method
	Loss related to COVID-19	91			－
	(Increase) decrease in notes and accounts receivable - trade						2,180			5,831
	(Increase) decrease in inventories	(6,695)	815
	(Increase) decrease in consumption taxes refund receivable						(484)			693
	Increase (decrease) in notes and accounts payable - trade	(1,110)	(3,894)
	Increase (decrease) in accounts payable - other						(2,220)			(915)
	(Increase) decrease in other assets	(722)	(341)
	Increase (decrease) in other liabilities						1			(609)
	Subtotal		23,661		28,604
	Interest and dividend income received						558			1,346
	Interest expenses paid	(58)	(74)
	Payments related to COVID-19						(86)			－
	Payments for office relocation expenses			－	(601)
	Income taxes paid						(9,019)			(5,591)
	Net cash provided by operating activities		15,055		23,684
	Cash flows from investing activities
	Purchase of fixed assets	(4,885)	(7,665)
	Proceeds from sales of fixed assets						41			3
	Payments into time deposits	(8,296)	(9,587)
	Refund from time deposits						7,979			10,742
	Payments for lease and guarantee deposits	(750)	(213)
	Proceeds from collection of lease and guarantee deposits	411		217
	Other, net	(1)	14
	Net cash used in investing activities		(5,501)	(6,488)
	Cash flows from financing activities
	Proceeds from issuance of stock						0			0
	Purchase of treasury stock	(0)	(10,095)
	Dividends paid						(4,182)			(3,511)
	Proceeds from share issuance to non-controlling	34			－
	shareholders
	Repayments of lease obligations						(1,015)			(944)
	Other, net			－	(10)
	Net cash used in financing activities						(5,164)			(14,561)
	Effect of exchange rate change on cash and cash equivalents		8,636		8,382
	Net increase (decrease) in cash and cash equivalents						13,026			11,016
	Cash and cash equivalents at beginning of period		101,443		106,640
	Cash and cash equivalents at end of period						114,469			117,657

8