Mitsubishi Logisnext : Earnings Report for the six months ended September 30, 2023

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

November 6, 2023

Consolidated Financial Results

for the Six Months Ended September 30, 2023

(Under Japanese GAAP)

Company name:	Mitsubishi Logisnext Co., Ltd.
Listing:	Tokyo Stock Exchange
Securities code:	7105
URL:	https://www.logisnext.com/en/
Representative:	Yuichi Mano, Representative Director and President
Inquiries:	Hiroki Mochizuki, Division Head, General Manager, Corporate Finance and
	Accounting Division, Corporate Finance and Accounting Headquarters
Telephone:	[phone]

Scheduled date to file quarterly securities report:	November 14, 2023
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results: None
Holding of quarterly financial results briefing:	Yes (for analysts)

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the six months ended September 30, 2023 (April 1, 2023 to September 30, 2023)

(1) Consolidated operating results (cumulative)

	Net sales		Operating profit
Six months ended	Millions of yen		%	Millions of yen	%
September 30, 2023	343,772		23.0	22,737	-
September 30, 2022	279,595		29.4	963	(38.3)

(Percentages indicate year-on-year changes.)

Ordinary profit	Profit attributable to
owners of parent
Millions of yen	%	Millions of yen	%
21,060	-	16,562	-
909	(36.5)	(1,426)	-

Note: Comprehensive income	For the six months ended September 30, 2023:	¥28,420 million	[160.2%]
		For the six months ended September 30, 2022:	¥10,923 million	[771.1%]
	Basic earnings	Diluted earnings
		per share	per share
Six months ended		Yen	Yen
September 30, 2023		155.31	154.81
September 30, 2022		(13.38)	-
Reference: Operating profit before amortization of goodwill
		For the six months ended September 30, 2023:	¥27,811 million	[347.3%]
		For the six months ended September 30, 2022:	¥6,217 million	[(1.4)%]

Mitsubishi Logisnext Co., Ltd. (the "Company") uses operating profit before amortization of goodwill as a key management indicator.

Notes: 1. At the end of the fiscal year ended March 31, 2023, the Company finalized the provisional accounting treatment for the business combination, and the figures for the six months ended September 30, 2022 reflect the details of the finalization of the provisional accounting treatment.

2. The year-on-year changes in operating profit and ordinary profit for the six months ended September 30, 2023 are 2,259.3% and 2,214.7%, respectively, and shown as "-" because they exceed 1,000%.

(2) Consolidated financial position

		Total assets		Net assets	Equity-to-asset ratio
As of		Millions of yen		Millions of yen	%
September 30, 2023		519,898		103,404	19.8
March 31, 2023		475,432		76,027	15.9
Reference: Equity	As of September 30, 2023:	¥102,802 million
	As of March 31, 2023:	¥75,455 million

Net assets per share

Yen

964.10

707.19

2. Cash dividends

			Annual dividends per share
	First quarter-end	Second quarter-end	Third quarter-end	Fiscal year-end	Total
	Yen		Yen	Yen	Yen	Yen
Fiscal year ended	-		-	-	9.00	9.00
March 31, 2023
Fiscal year ending	-		-
March 31, 2024
Fiscal year ending				-	19.00	19.00
March 31, 2024
(Forecast)

Note: Revisions to the forecast of cash dividends most recently announced: Yes

Regarding revisions to the forecast of cash dividends, please refer to the "Notice Concerning Revisions to Full-Year Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2024 and Revisions to the Forecasts of Cash Dividends" (in Japanese only) announced today (November 6, 2023).

3. Consolidated earnings forecasts for the fiscal year ending March 31, 2024 (April 1, 2023 to March 31, 2024)

(Percentages indicate year-on-year changes.)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Basic
		earnings
		owners of parent
								per share
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Fiscal year ending	690,000		12.1	40,000	171.9	36,000	209.1	23,000	232.7	215.68
March 31, 2024

Note: Revisions to the earnings forecasts most recently announced: Yes

Regarding revisions to the consolidated earnings forecasts, please refer to the "Notice Concerning Revisions to Full- Year Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2024 and Revisions to the Forecasts of Cash Dividends" (in Japanese only) announced today (November 6, 2023).

Reference: Operating profit before amortization of goodwill

¥50,000 million [100.0%]

* Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): Yes

Excluded:

1 company (Mitsubishi Logisnext Americas (Marengo) Inc.)

1. Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: None
2. Changes in accounting policies, changes in accounting estimates, and restatement
3. 1. Changes in accounting policies due to revisions to accounting standards and other regulations: None
   2. Changes in accounting policies due to other reasons: None
   3. Changes in accounting estimates: None
   4. Restatement: None
4. Number of issued shares (common stock)
5. 1. Total number of issued shares at the end of the period (including treasury stock)

As of September 30, 2023

As of March 31, 2023

106,712,013 shares

106,705,013 shares

(ii) Number of treasury stock at the end of the period

As of September 30, 2023

As of March 31, 2023

81,242 shares

7,216 shares

1. Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

Six months ended September 30, 2023

Six months ended September 30, 2022

106,641,686 shares

106,644,083 shares

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
• Proper use of earnings forecasts, and other special matters Caution regarding forward-lookingstatements
  The forward-looking statements, including the financial forecasts shown in this document are based on information currently available to the Company and on certain assumptions deemed to be reasonable. As such, they do not constitute guarantees by the Company of future performance. Actual performance and other results may differ materially from these forecasts due to various factors. For matters related to the earnings forecasts, please see "1. Qualitative information regarding financial results for the first six months, (3) Explanation of consolidated earnings forecasts and other forward-looking statements" on page 4 of the attached material.

	Mitsubishi Logisnext Co., Ltd.
Attached Material
	Index
1. Qualitative information regarding financial results for the first six months	2
(1)	Explanation of operating results	2
(2)	Explanation of financial position	4
(3)	Explanation of consolidated earnings forecasts and other forward-looking statements	4
2. Quarterly consolidated financial statements and significant notes thereto	5
(1)	Quarterly consolidated balance sheet	5
(2)	Quarterly consolidated statement of income and quarterly consolidated statement of
	comprehensive income	7
	Quarterly consolidated statement of income (cumulative)	7
	Quarterly consolidated statement of comprehensive income (cumulative)	8
(3)	Notes to quarterly consolidated financial statements	9
	Notes on premise of going concern	9
	Notes on significant changes in the amount of shareholders' equity	9
	Segment information	9
3. Other	11

- 1 -

Mitsubishi Logisnext Co., Ltd.

1. Qualitative information regarding financial results for the first six months

1. Explanation of operating results
   The global economy in the six months ended September 30, 2023, has seen central banks in various countries maintain their monetary tightening measures in response to a persistently high level of inflation, although the increase in prices has been slowing, and with Russia's prolonged aggression in Ukraine showing no end in sight, economic growth is slowing down at a faster pace. Although the increase in transport costs caused by the rapid recovery phase out of the COVID-19 pandemic has subsided, inflation is driving not only higher labor costs but also higher costs in a wide range of areas including fuel and components. In Japan and overseas, this is having a growing impact.
   Against this backdrop, the domestic market for forklifts and other material handling equipment remained firm at pre-COVID-19 levels. Overseas, though demand in the Americas is on a downward trend as buyers take a wait-and-see approach due to a sense of economic slowdown, demand continues to exceed pre-COVID-19 levels, as it did in the previous fiscal year, due to stable logistics needs. On the other hand, Europe's economic stagnation has become prolonged, in part due to the impact of inflation, with demand slumping after shrinking from a temporary rebound. In addition, although Asia was relatively unaffected by the situation in Ukraine, the market has weakened slightly because of inflation and interest rate hikes. China was showing signs of recovery due to the lifting of the zero- COVID policy, but its economy then slowed due to deterioration in the real estate market, and the market for material handling equipment has not yet recovered to expected levels.
   At the Company, the major challenge of longer lead times due to delays in the supply of various components is gradually abating but high costs persist. Despite these circumstances, the Group as a whole secured sufficient orders. In addition, the Group worked on achieving production improvements by eliminating the components shortages in Japan and overseas, accelerating shipments. As a result, the effects of price optimization have effectively expanded. However, given the high levels of inflation and deteriorating conditions in the Middle East, the outlook for the global economy remains unclear and unpredictable.
   Under these circumstances, net sales for the period under review totaled ¥343,772 million (up 23.0% year on year).
   Profits were affected by high costs, but net sales increased due to contribution of the acceleration of shipments mostly in the Americas at a pace exceeding the plan and the expanded effect of price optimization, consequently operating profit was ¥22,737 million (up 2,259.3% year on year), ordinary profit was ¥21,060 million (up 2,214.7% year on year), and, with the decrease in tax expenses due to the reversal of valuation allowance, profit attributable to owners of parent was ¥16,562 million (compared to a loss of ¥1,426 million in the same period of the previous fiscal year).
   Operating profit before amortization of goodwill was ¥27,811 million (up 347.3% year on year), and the operating profit margin was 8.1% (up 5.9 percentage points year on year).

	Six months ended	Six months ended	Change
(Billions of yen)	September 30, 2022	September 30, 2023	(Billions of yen)	(%)
Net sales	279.59	343.77	64.17	23.0
Operating profit before	6.21	27.81	21.59	347.3
amortization of goodwill
(%)	2.2	8.1
Operating profit	0.96	22.73	21.77	2,259.3
(%)	0.3	6.6
Ordinary profit	0.9	21.06	20.15	2,214.7
(%)	0.3	6.1
Profit (loss) attributable to	(1.42)	16.56	17.98	-
owners of parent
(%)	-	4.8

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Mitsubishi Logisnext Co., Ltd.

Operating results by segment are as follows.

Japan

Net sales in Japan were ¥92,887 million (up 15.6% year on year) as orders remained steady, components shortages have been abating, and the effects of price optimization are also starting to contribute. Segment profit was ¥3,133 million (compared to a loss of ¥1,500 million in the same period of the previous fiscal year) due to the increase in net sales, the settling of increase in marine transportation costs and the impact of yen depreciation in the export business despite the persistent high-cost environment.

Segment profit before amortization of goodwill was ¥5,554 million (up 506.8% year on year).

Japan	Six months ended	Six months ended	Change
(Billions of yen)	September 30, 2022	September 30, 2023	(Billions of yen)	(%)
Net sales	80.32	92.88	12.56	15.6
Operating profit before	0.91	5.55	4.63	506.8
amortization of goodwill
(%)	1.1	6.0
Operating profit (loss)	(1.50)	3.13	4.63	-
(%)	-	3.4

Overseas

Net sales in Overseas were ¥250,885 million (up 25.9% year on year) due to the expanded effects of price optimization in line with an increase in units sold in the Americas at a pace exceeding the plan, and the tailwind from the economic impact of yen depreciation. Segment profit was ¥19,603 million (up 695.7% year on year) due largely to the increase in net sales.

Segment profit before amortization of goodwill was ¥22,257 million (up 319.8% year on year).

Especially in the same period of the previous fiscal year in Overseas, price optimization had not been able to cover the higher costs in the inflationary environment post-COVID-19. Since then, the gradual elimination of components shortages has led to increased production, accelerated shipments, and net sales and segment profit in Overseas increased significantly.

Overseas	Six months ended	Six months ended	Change
(Billions of yen)	September 30, 2022	September 30, 2023	(Billions of yen)	(%)
Net sales	199.27	250.88	51.61	25.9
Operating profit before	5.30	22.25	16.95	319.8
amortization of goodwill
(%)	2.7	8.9
Operating profit	2.46	19.60	17.14	695.7
(%)	1.2	7.8

- 3 -

Mitsubishi Logisnext Co., Ltd.

1. Explanation of financial position
   As of September 30, 2023, total assets were ¥519,898 million, an increase of ¥44,466 million from the end of the previous fiscal year. Current assets increased by ¥25,681 million due to the impact of yen depreciation and an increase in inventories. Non-current assets increased by ¥18,784 million due to the impact of yen depreciation and an increase in machinery, equipment and vehicles.
   Total liabilities were ¥416,494 million, an increase of ¥17,088 million from the end of the previous fiscal year, due to an increase in foreign exchange translated amounts mainly from the impact of yen depreciation.
   Net assets, excluding share acquisition rights and non-controlling interests, were ¥102,802 million, an increase of ¥27,347 million from the end of the previous fiscal year. The main factors were an increase in retained earnings from profit attributable to owners of parent and an increase in foreign currency translation adjustment.
2. Explanation of consolidated earnings forecasts and other forward-looking statements
   Regarding our consolidated earnings forecasts, based on our performance through the six months ended September 30, 2023, we have revised our full-year earnings forecasts and our forecasts of cash dividends. For details, please refer to the "Notice Concerning Revisions to Full-Year Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2024 and Revisions to the Forecasts of Cash Dividends" (in Japanese only) announced today (November 6, 2023).

- 4 -

Mitsubishi Logisnext Co., Ltd.

2. Quarterly consolidated financial statements and significant notes thereto

(1) Quarterly consolidated balance sheet

			(Millions of yen)
		As of March 31, 2023	As of September 30, 2023
Assets
Current assets
Cash and deposits	13,245	18,001
Notes and accounts receivable - trade, and contract	101,148	106,479
assets
Electronically recorded monetary claims - operating	2,507	2,207
Merchandise and finished goods	62,840	75,135
Work in process	14,805	13,950
Raw materials and supplies	30,646	33,634
Other	40,749	42,606
Allowance for doubtful accounts	(1,383)	(1,772)
Total current assets	264,561	290,242
Non-current assets
Property, plant and equipment
Buildings and structures, net	21,803	22,666
Machinery, equipment and vehicles, net	72,685	87,674
Land	22,133	22,067
Leased assets, net	27,758	28,906
Other, net	4,551	4,737
Total property, plant and equipment	148,933	166,054
Intangible assets
Goodwill	25,473	23,143
Other	15,664	15,734
Total intangible assets	41,137	38,877
Investments and other assets
Investment securities	7,152	7,893
Other	13,698	16,869
Allowance for doubtful accounts	(50)	(39)
Total investments and other assets	20,800	24,724
Total non-current assets	210,871	229,655
Total assets		475,432	519,898

- 5 -

			Mitsubishi Logisnext Co., Ltd.
			(Millions of yen)
		As of March 31, 2023	As of September 30, 2023
Liabilities
Current liabilities
Notes and accounts payable - trade	86,240	80,901
Electronically recorded obligations - operating	15	-
Short-term borrowings	51,344	55,293
Lease liabilities	7,199	7,669
Income taxes payable	3,313	4,193
Provision for bonuses	4,798	4,779
Provision for bonuses for directors (and other	94	46
officers)
Provision for product warranties	4,215	4,400
Provision for loss on liquidation of subsidiaries and	75	75
associates
Other	51,411	56,164
Total current liabilities	208,709	213,523
Non-current liabilities
Long-term borrowings	124,281	127,135
Lease liabilities	20,332	20,968
Provision for product warranties	2,561	438
Provision for retirement benefits for directors (and	7	7
other officers)
Retirement benefit liability	16,263	16,644
Other	27,248	37,775
Total non-current liabilities	190,695	202,970
Total liabilities	399,405	416,494
Net assets
Shareholders' equity
Share capital	4,938	4,940
Capital surplus	34,775	34,785
Retained earnings	16,704	32,307
Treasury shares	(2)	(92)
Total shareholders' equity	56,415	71,940
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	2,387	2,521
Foreign currency translation adjustment	17,019	28,696
Remeasurements of defined benefit plans	(367)	(355)
Total accumulated other comprehensive income	19,040	30,862
Share acquisition rights	277	272
Non-controlling interests	294	329
Total net assets	76,027	103,404
Total liabilities and net assets		475,432	519,898

- 6 -

Mitsubishi Logisnext Co., Ltd.

1. Quarterly consolidated statement of income and quarterly consolidated statement of comprehensive income
   Quarterly consolidated statement of income (cumulative)

			(Millions of yen)
		Six months ended	Six months ended
		September 30, 2022	September 30, 2023
Net sales	279,595	343,772
Cost of sales	219,470	255,292
Gross profit	60,124	88,480
Selling, general and administrative expenses	59,161	65,742
Operating profit	963	22,737
Non-operating income
Interest income	340	542
Dividend income	155	55
Share of profit of entities accounted for using equity	49	76
method
Foreign exchange gains	596	432
Other	188	166
Total non-operating income	1,330	1,272
Non-operating expenses
Interest expenses	1,270	2,876
Other	114	72
Total non-operating expenses	1,384	2,949
Ordinary profit	909	21,060
Extraordinary income
Gain on sale of non-current assets	118	345
Gain on sale of investment securities	4	1
Insurance claim income	-	60
Total extraordinary income	123	407
Extraordinary losses
Loss on disposal of non-current assets	67	57
Impairment losses	-	29
Loss on sale of investment securities	0	-
Loss on valuation of investment securities	13	-
Loss on liquidation of subsidiaries and associates	399	-
Loss on disaster	0	-
Business restructuring expenses	-	107
Other	91	-
Total extraordinary losses	572	194
Profit before income taxes	460	21,273
Income taxes - current	751	7,478
Income taxes - deferred	1,150	(2,792)
Total income taxes	1,902	4,686
Profit (loss)	(1,441)	16,587
Profit (loss) attributable to non-controlling interests	(15)	24
Profit (loss) attributable to owners of parent		(1,426)	16,562

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