Mitsubishi Logisnext : Script/Q＆A for Financial Results Briefing for the FY2020

Mitsubishi Logisnext Co., Ltd.

Financial Results Briefing for the Fiscal Year Ended March 2021

May 27, 2021

[Number of Speakers]	4
	Masanori Kagami	Chairman of the Board
	Takashi Kubo	President and CEO
	Takatoshi Uno	Executive Officer, CFO, Head of Corporate
		Finance and Accounting Headquarters, and
		Division Head, General Manager, Corporate
		Finance Planning Division
	Katsutoshi Yuasa	Member of the Executive Team, Division
		Head, General Manager, Corporate Strategy
		and Planning office

Presentation

Moderator: Thank you for waiting. As the time has come, we will now begin the briefing on Mitsubishi Logisnext's financial results for the fiscal year ended March 31, 2021.

Thank you very much for taking time out of your busy schedule to participate in our financial results briefing.

Today, we would like to present an overview of our financial results for the fiscal year ended March 31, 2021, and our management policy for the fiscal year ending March 2022 FY2021.

Today, Mr. Uno, CFO and Head of Corporate Finance and Accounting Headquarters, will provide an overview of the financial results for the fiscal year ended March 31, 2021, and Mr. Kubo, President and CEO, will explain the management policy for FY2021.

We will now move on to an overview of the financial results for the fiscal year ended March 31, 2021. Mr. Uno, please.

Uno: I am Uno of Mitsubishi Logisnext. Thank you very much for joining us today for our financial results briefing. Today's presentation will consist of 2 parts, the first half of which will be an overview of our financial results by me, and the second half of which will be an explanation of our management policy for FY2021 by President Kubo.

As for the market environment surrounding our company, both domestic and overseas markets bottomed out in the first quarter of last fiscal year and are gradually recovering from the COVID-19 crisis. With the spread of the new coronavirus infection as it is, the initial impact in Japan was relatively minor, but there was a major downside impact overseas. However, the recovery in Europe and the United States since September has been very strong.

Even in Japan, where the economic recovery and the recovery of the forklift market have been slow, the economy has recovered to the level of the same period of the previous year in the third and fourth quarters.

As for the summary of our consolidated business results under these circumstances, net sales declined by 12.8% YoY, as sales did not recover in line with the recovery in orders, partly due to the lead time from order receipt to production and shipment. Operating income before amortization of goodwill decreased by 40%, although the impact of the large decrease in sales was expected to be covered by fixed cost reductions and other measures.

The above table is the income statement. Net sales were JPY391.5 billion, operating income before amortization of goodwill was JPY10.990 billion, and operating income after amortization of goodwill was JPY1.590 billion, which was down 81.1% compared to the same period of the previous year.

As in the previous fiscal year ended March 2020, extraordinary losses were recorded, resulting in a final loss of JPY2.68 billion, the second consecutive fiscal year in which a net loss was recorded.

As for the significant loss items, please refer to the summary of financial results. These include the loss on the closure of the Hefei plant in China, one-time expenses incurred in connection with the reduction of personnel at global bases caused by COVID-19, and the liquidation of the defined benefit pension plan of a US subsidiary.

I will explain the situation by region. From this page onward, operating income before amortization of goodwill will be referred to as operating income.

Page 5 shows the status of net sales and operating income by region. As shown in the upper figure, while domestic sales decreased by JPY10.5 billion, or 6%, overseas sales decreased by JPY46.9 billion, or approximately 17%, which is a significant decrease.

As a result, operating income decreased by 33% in the domestic business and by 46% in the overseas business, as shown in the lower figure, with a particularly large decrease in the overseas business.