Mitsubishi Logisnext : Q3 Financial Results for FY2023（1.39MB）

FY2023 Q3

Financial Results

(April 1 to December 31, 2023)

Feb. 13, 2024

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1. FY2023 Q3 Summary

Economic Market Trends

• The global economy has seen price levels remain high despite a slowdown in inflation and central banks in various countries maintaining their monetary tightening measures, but it is beginning to shift to a phase in which interest rates are expected to be lowered. In addition, Russia's prolonged aggression in Ukraine has continued for two years and military clashes between Israel and Hamas have erupted, leaving the global economy in an uncertain situation, with slowing and stagnant growth. Although the increase in transport costs caused by the rapid recovery phase out of the COVID-19 pandemic has subsided since the beginning of the period under review, inflation is driving higher labor costs and higher costs in a wide range of areas. In Japan and overseas, this is having a growing impact.
• The domestic market for material handling equipment remained firm at pre-COVID-19 levels. Overseas, though temporary special demand following COVID-19 has leveled off in the Americas, the market has remained firm based on stable logistics needs. In Europe, despite the easing of inflationary pressures, the economy has not yet recovered, and after shrinking following the post-COVID-19 rebound demand, the economy has stagnated. In Asia, as in the Americas, while special demand following COVID-19 has subsided, demand for material handling equipment remains firm. However, in China, despite a temporary recovery trend due to the lifting of the zero-COVID-19 policy, the economy has slowed due in part to the deterioration of the real estate market, and the future of the market for material handling equipment is a concern.
• The longer lead times due to delays in the supply of various components is gradually abating but high costs persist. The Group as a whole secured sufficient orders and worked on accelerating shipments by achieving production improvements through the elimination of the components shortages in Japan and overseas. As a result, the effects of price optimization have effectively expanded, and the economic impact of the yen depreciation has acted as a tailwind so far.

Summary of FY2023 Q3 Results

• Net sales increased by 18.1% YoY due to an increase in units sold over the previous year, mainly in the Americas, the effects of price optimization, and the impact of yen depreciation.
• Operating profit before amortization of goodwill increased 186.1% YoY despite the persistent high-cost environment, due to the contribution of accelerating shipments in the Americas and the expanded effects of price optimization in Japan and overseas.

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2. Financial Highlights

						Unit: Hundred million JPY
Profit and Loss
FY2022 Q3(*)		FY2023 Q3	YoY Change
Statement
Net Sales	4,409.5		5,209.5	+799.9			+18.1%
Operating Profit	152.5		436.4	+283.8			+186.1%
(Before amortization of goodwill)	(3.5%)		(8.4%)
(Operating profit margin)
Amortization of	78.2		76.6	―			―
Goodwill
Operating Profit	74.3		359.7	+285.4			+384.1%
(Operating profit margin)	(1.7%)		(6.9%)
Ordinary Profit	60.6		328.4	+267.8			+441.3%
(Ordinary profit margin)	(1.4%)		(6.3%)
Profit Attributable to	27.6		245.8	+218.2			+790.2%
Owners of Parent
(0.6%)		(4.7%)
(Net income margin)
* At the end of the fiscal year ended March 31, 2023, we finalized the provisional	FY2022 Q3 actual FX rates: USD=JPY136.51 EUR=JPY140.59 CNY=JPY19.88
accounting treatment related with past M&A activity in United States. The figures	FY2023 Q3 actual FX rates: USD=JPY143.29 EUR=JPY155.29 CNY=JPY19.98
(goodwill, etc.) for the six months ended December 31, 2023 reflect the detailed
finalization of the provisional accounting treatment.
Balance Sheet	FY2022 Q4	FY2023 Q3	Change
Total Assets	4,754.3		5,099.3	+345.0			+7.3%
Total Liabilities	3,994.0		4,038.7	+44.6			+1.1%
Net Assets	760.2		1,060.6	+300.3			+39.5%

© MITSUBISHI LOGISNEXT CO., LTD. All rights reserved.	End of FY2022 Q4 FX rates: USD=JPY133.53 EUR=JPY145.72 CNY=JPY19.42	3
End of FY2023 Q3 FX rates: USD=JPY141.83 EUR=JPY157.12 CNY=JPY19.93

3. Business Results by Segment

Net Sales

• Net sales increased by 18.1% YoY due to an increase in units sold mainly in the Americas, the contribution from the effects of price optimization, and the tailwind from the economic impact of yen depreciation.

Unit:				FY2023 Q3 Sales by Region
Hundred million JPY	Japan	Overseas
				China&
6,000			Increased	5,209.5
		Europe	Asia
5,000			4,409.5	+799.9		5.3％ Japan
				(+18.1％)		14.8％
4,000						（6.7％）27.2％
3,000					3,794.2	（17.0％）	（28.8％）
		3,138.3
2,000						Americas
1,000					1,415.2
		1,271.2			52.7％
0
					（47.5％）
		FY2022 Q3		FY2023 Q3

() = the same period last year

Operating Profit*

• Operating profit increased by 186.1% YoY due to the expanded effects of price optimization, the settling of increase in marine transportation costs, and the impact of yen depreciation.

Unit:	Japan Overseas		FY2023 Q3 Operating Profit by Segment
Hundred million JPY	436.4
500			Increased	Japan
400
		+283.8
300			(+186.1％)		21.6％
			342.2	(22.0％)
			152.5
200				Overseas
100			119.0
		94.2	78.4%
0			33.5	(78.0％)

FY2022 Q3	FY2023 Q3
* Operating profit before amortization of goodwill	() = the same period last year
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4. Net Sales by Region (including FX impacts)

		Japan
(Unit: Hundred million JPY)	Increased 1,415.2
1,500	1,271.2
+144.0
		(+11.3％)	486.3
1,000	467.9
500	803.2			928.8
0
	FY2022 Q3			FY2023 Q3
	Q1 + Q2	Q3
		Europe
(Unit: Hundred million JPY)			FX impact
		Increased	66.2
1,000
751.0	+20.5	771.6
800	(+2.7％)
600	264.0			262.0
400
200	486.9			509.5
0
	FY2022 Q3			FY2023 Q3
	Q1 + Q2	Q3

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		Americas	FX impact
(Unit: Hundred million JPY)			129.9
Increased	2,745.3
3,000
	+652.5
	2,092.7	(+31.2％)	934.4
2,000
	784.3
1,000				1,810.9
	1,308.4
0
	FY2022 Q3		FY2023 Q3
	Q1 + Q2	Q3
		China & Asia	FX impact
(Unit: Hundred million JPY)
		1.7
	294.5	Decreased	277.3
300
	-17.2
	97.2	(-5.8％)	88.9
200
100	197.3			188.4
0
	FY2022 Q3			FY2023 Q3
	Q1 + Q2	Q3
				5

5. Net Sales - FY2022 Q3 vs FY2023 Q3

◼ Japan:	Net sales increased as components shortages have been abating and the effects of
	price optimization are also starting to contribute.

• Overseas: Net sales increased due to the contribution of accelerating shipments in the Americas, the expanded effects of price optimization, and the impact of yen depreciation. However, net sales in Europe and China & Asia regions decreased.

(Unit: Hundred million JPY)

		Americas	Europe		China &
				Asia
FX	Japan
impacts	+144.0	+522.6	-45.6	-18.9
+197.8

5,209.5

4,409.5	Net Sales increased
	by 799 (+18.1%)

FY2022 Q3

FY2023 Q3

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6. Operating Profit - FY2022 Q3 vs FY2023 Q3

• Material costs remain high in Japan but are improving in Europe and the Americas. Labor costs also remain high due to inflation.
• Operating profit before amortization of goodwill increased 186.1% YoY due to higher sales, the effects of price optimization, and the settling of increase in marine transportation costs.

	FX	(Unit: Hundred million JPY)
	impacts,
Effects of	etc.
U.S. tariffs

price optimization

Operating profit

(before amortization of goodwill)

Amortization

of goodwill

increased by 283 (+186.1%)

Sales increase and

mix optimization

Decrease in

		transport
-78.2	Increase in	costs
	material costs
Amortization
of goodwill
		Increase in	Including:
	labor costs, etc.	Decrease in transport costs	+69.8	FY2023 Q3	FY2023 Q3
FY2022 Q3	FY2022 Q3		Increase in volume	-5.3
(before amortization				(before amortization
	of goodwill)				of goodwill)

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7. Consolidated Balance Sheet

• Net assets increased due to an increase in retained earnings from net profit and an increase in foreign currency translation adjustment. The capital adequacy ratio improved from 15.9% to 20.7%.

Assets

Liabilities/ Net Assets

4,7545,099

2,6452,857

			Assets
			increased
2,108	by 345	2,241
		FY2022 Q4				FY2023 Q3
		Non-current assets		Current assets

4,754		5,099
	Liabilities
	increased
3,994	by 44	4,038
Net assets
	increased
760	by 300	1,060
FY2022 Q4		FY2023 Q3

Net assets Liabilities

		(Unit: Hundred million JPY)
Item	FY2022	FY2023	Change
Q4	Q3
Current assets	2,645	2,857	+212
Property, plant and equipment	1,489	1,649	+160
Intangible assets	411	350	-60
Inv estments and	208	241	+33
other assets
Total non-current assets	2,108	2,241	+132
Total assets	4,754	5,099	+345

Current assets: Increased

Increased due to exchange rate conversion effects, cash and deposits, and inventories, etc.

Non-current assets: Increased

Increased due to exchange rate conversion effects, and property, plant and equipment, etc.

Item	FY2022	FY2023	Change
Q4	Q3
Current liabilities	2,087	2,016	-70
Non-current liabilities	1,906	2,022	+115
Total liabilities	3,994	4,038	+44
Total net assets	760	1,060	+300
Total liabilities and net assets	4,754	5,099	+345

Liabilities: increased

Exchange rate conversion effects and decrease in accounts payable, etc.

Net assets: Increased

Increased due to an increase in retained earnings and the foreign currency translation adjustment.

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8. Cash Flow

• C/F from operating activities increased 41.4 B JPY (3.4 B → 44.9 B) YoY due to an increase in profit before income taxes.
• C/F from investing activities decreased 20.5 B JPY (-23.5 B → -44.0 B) YoY due to a shift from collection of short-term loans to deposits in FY2023 (impact: -13.3 B JPY) and an increase in acquisition of property, plant and equipment.
• Free C/F increased 20.9 B JPY (-20.1 B → 0.8 B) YoY due to improved C/F from operating activities (+34.3 B JPY YoY if the above short-term loan impact is factored in).

Amortization

of

Depreciation goodwill expenses

Fund procurement

by sales and leaseback

176.5

(Unit: Hundred million JPY)

Profit before	Other
income taxes
operating
		C/F
				Sales of			Increase in
						other financial
				property, plant
						transactions
				and equipment
132.4
							Cash	Other
		Acquisition of
						dividend
		Increase in				financial
		property, plant	Other Decrease in
			Decrease in	payment	C/F
		and equipment	short-terminvestingshort-term
				loans	C/F		long-term
End of					borrowings borrowings
FY2022		Cash and cash equivalents increased 85.7
Cash	C/F from operating activities	C/F from investing activities	C/F from financing activities
		44.9 B JPY		-44.0 B JPY			7.1 B JPY
	(3.4 B JPY in the same	(-23.5 B JPY in the same		(28.0 B JPY in the same
		period last year)		period last year)			period last year)

Free C/F 0.8 B JPY

(-20.1 B JPY in the same period last year)

FX

effects, 218.2 etc.

End of

FY2023 Q3

Cash

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9. Upward Revision of FY2023 Forecast

• Net sales are expected to be in line with the forecast announced in November 2023.
• Profits are expected to exceed the previous forecast in all profit categories, due to accelerated shipments in the Americas, mitigation of cost increases in Japan and overseas, and the expanded effects of price optimization, despite deteriorating market conditions in Europe and other regions.

	FY2023 Forecast	FY2023 Revised Forecast	Change
(Unit: Hundred million JPY)	(Published in Nov. 2023)	(Published in Feb. 2024)	Compared to Previous Forecasts
Units Sold	115,000 units	115,000 units	－	－
Net Sales	6,900.0	6,900.0	－		－
Operating Profit	500.0	550.0	+50.0		+10.0%
(Before amortization of goodwill)	(7.2%)	(8.0%)
(Operating profit margin)
Amortization of	100.0	100.0	－		－
Goodwill
Operating Profit	400.0	450.0	+50.0		+12.5%
(Operating profit margin)	(5.8%)	(6.5%)
Ordinary Profit	360.0	400.0	+40.0		+11.1%
(Ordinary profit margin)	(5.2%)	(5.8%)
Profit Attributable to	230.0	290.0	+60.0		+26.1%
Owners of Parent
(3.3%)	(4.2%)
(Net income margin)
Dividend per Share	19 JPY	20 JPY	+1 JPY		－

FY2023 initial plan FX rates: USD=JPY130.00 EUR=JPY140.00 CNY=JPY20.00

© MITSUBISHI LOGISNEXT CO., LTD. All rights reserved.FY2023 Q3 actual FX rates: USD=JPY143.29 EUR=JPY155.29 CNY=JPY19.98 10

FY2023 Q4 plan FX rates: USD=JPY140.00 EUR=JPY150.00 CNY=JPY19.70