NGK Insulators : Summary of Consolidated Financial Results for the Year Ended March 31, 2023

The following statement is an English translation of the original Japanese document provided for your convenience. In the event of any discrepancy between this translation and the Japanese original, the original is presumed to be correct.

Summary of Consolidated Financial Results

for the Year Ended March 31, 2023

[Japanese GAAP]

April 28, 2023

Company Name: NGK INSULATORS, LTD.

Stock Exchange Listings : Tokyo and Nagoya

Listing Code : 5333

URL : https://www.ngk-insulators.com/en/

Representative : (Title) President (Name) Shigeru Kobayashi

Contact : (Title) General Manager, Finance & Accounting Department. (Name) Hideaki Tsukui (TEL) [phone]

Scheduled date of the Annual Shareholders' Meeting : June 26, 2023

Scheduled date of the filing of Securities Report : June 26, 2023

Scheduled date of Year-End Dividend Payment : June 27, 2023

Availability of Supplementary Explanatory Materials Prepared for Financial Results : Available

Briefing Session on Financial Results to be held : Yes (for securities analysts and institutional investors)

					(All yen amounts are rounded down to the nearest million.)
1. Consolidated Financial Results for the Year Ended March 31, 2023	(From April 1, 2022 to March 31, 2023)
(1) Consolidated Operating Results			% represents increase (decrease) from the previous period
	Net sales		Operating income	Ordinary income	Net income attributable to
		owners of the parent
Fiscal Year ended	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
March 31, 2023	559,240	9.6	66,761	(20.1)	65,887	(23.6)	55,048	(22.3)
March 31, 2022	510,439	12.9	83,527	64.3	86,248	62.7	70,851	84.0

(Note) Comprehensive income	: FY 2022	¥82,753 million	(16.1%)
	: FY 2021	¥98,684 million	50.5%
	Net income	Diluted net income	Ratio of net income	Ratio of ordinary	Ratio of operating
	per share	per share	to equity	income to total assets	income to net sales
Fiscal Year Ended	Yen	Yen	%	%	%
March 31, 2023	177.47	177.17	9.0	6.5	11.9
March 31, 2022	226.56	226.17	12.9	9.1	16.4

(Reference) Share of profit of entities accounted for using equity method	: FY 2022	¥1,522 million
					: FY 2021	¥1,666 million
(2) Consolidated Financial Position
		Total assets	Net assets	Equity ratio	Net assets per share
Fiscal Year Ended		Millions of yen	Millions of yen		%	Yen
March 31, 2023		1,029,168	642,446		61.7	2,074.66
March 31, 2022		982,833	589,594		59.3	1,871.22
(Reference) Equity	: As of March 31, 2023	¥635,447 million
	: As of March 31, 2022	¥583,147 million
(3) Consolidated Cash Flows
		Cash flows from	Cash flows from	Cash flows from	Cash & cash equivalents
		operating activities	investing activities	financing activities	at end of period
Fiscal Year Ended		Millions of yen	Millions of yen		Millions of yen	Millions of yen
March 31, 2023			97,949	(52,006)		(34,568)	168,863
March 31, 2022			94,831	(46,291)		(45,263)	154,855

2. Dividend Payments

		Dividend per share			Total amount	Dividend	Dividend on
							payout ratio	equity ratio
	1Q-end	2Q-end	3Q-end	Year-end	Total	of dividends
	(Consolidated)	(Consolidated)
Fiscal Year Ended	Yen	Yen	Yen		Yen	Yen	Millions of yen	%	%
March 31, 2022	-	30.00	-		33.00	63.00	19,632	27.8	3.6
March 31, 2023	-	33.00	-		33.00	66.00	20,396	37.2	3.3
Fiscal Year Ending	-	25.00	-		25.00	50.00		39.8
March 31, 2024 (forecast)

3. Forecasts of Consolidated Financial Results for the Fiscal Year Ending March 31, 2024

• represents increase (decrease) from the previous period

	Net sales		Operating income	Ordinary income	Net income attributable	Net income per
		to owners of the parent	share
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Six months Ending	265,000	(3.5)	25,000	(35.6)	23,000	(33.4)	16,000	(39.6)	52.23
September 30, 2023
Fiscal Year Ending	565,000	1.0	56,000	(16.1)	53,000	(19.6)	38,500	(30.1)	125.67
March 31, 2024

Notes

1. Significant changes in subsidiaries during this period: None
2. Changes in accounting policies, accounting estimates and retrospective restatements

(i)

Changes in accounting policies due to revisions of accounting standards

:

Yes

(ii)

Changes in accounting policies other than the above (i)

:

None

(iii)

Changes in accounting estimates

:

None

(iv)

Retrospective restatement

:

None

(3) Number of shares outstanding (Common Shares)

(i)

Number of shares outstanding at period

March 31, 2023

311,829,996

shares

March 31, 2022

317,211,996

shares

end including treasury stocks

(ii)

Number of treasury stocks at period end

March 31, 2023

5,539,120

shares

March 31, 2022

5,570,919

shares

Average number of shares outstanding

(iii)

March 31, 2023

310,189,352

shares

March 31, 2022

312,726,048

shares

over period

(Reference) Overview of Non-Consolidated Financial Results

1. Non-Consolidated Financial Results for the Year Ended March 31, 2023 (from April 1, 2022 to March 31, 2023)

(1) Non-Consolidated Operating Results

% represents increase (decrease) from the previous period

Net sales

Operating income

Ordinary income

Net income

Fiscal Year Ended

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

March 31, 2023

296,750

(1.6)

31,770

(37.0)

44,723

(39.8)

47,544

(28.8)

March 31, 2022

301,615

25.7

50,453

241.3

74,298

204.9

66,820

245.9

Net income

Diluted net income

per share

per share

Fiscal Year Ended

Yen

Yen

March 31, 2023

153.28

153.02

March 31, 2022

213.67

213.30

(2) Non-Consolidated Financial Position

		Total assets		Net assets	Equity ratio	Net assets per share
Fiscal Year Ended		Millions of yen		Millions of yen	%	Yen
March 31, 2023			634,823		360,118	56.6	1,172.86
March 31, 2022			619,380		342,619	55.2	1,096.38
(Reference) Equity:	As of March 31, 2023	¥359,236 million
	As of March 31, 2022	¥341,678 million

• The Summary of Consolidated Financial Results is not subject to audit by certified public accountant or audit firm.
• Explanation of appropriate use of results forecasts and other notes

This document contains forward-looking statements that are based on information and certain assumption NGK INSULATORS, LTD. (the "Company") has acquired and deemed reasonable as of the time of the release and the Company does not guarantee the achievement of them. Actual future results and trends may differ materially from those in the forecasts due to a variety of factors. For the basis of presumption of the business forecast and the notes on its use, please refer to "1. Overview of Business Results and Others, (4) Future Outlook.

Contents of Appendix
1. Overview of Business Results and Others ･････････････････････････････････････････････････････････････	2
(1) Overview of Business Results for the Fiscal Year Ended March 31, 2023	････････････････････････････････････	2
(2) Summary of Financial Position for the Fiscal Year Ended March 31, 2023	･･･････････････････････････････････	3
(3) Summary of Cash Flows for the Fiscal Year Ended March 31, 2023 ････････････････････････････････････････	3
(4)	Future Outlook ････････････････････････････････････････････････････････････････････････････	4
(5)	Basic Policy on Profit Distribution and Dividends for the Fiscal Year Ended March 31, 2023, and the Fiscal Year Ending	4
(5)	March 31, 2024 ･･･････････････････････････････････････････････････････････････････････････

2. Management Policies ････････････････････････････････････････････････････････････････････････････	5
(1) Basic Management Policies of the Company ･･･････････････････････････････････････････････････････	5
(2) Targeted Management Indicators and Capital Policy ･･････････････････････････････････････････････････	5
(3) Medium-toLong-Term Management Strategies and Issues to Be Addressed ･････････････････････････････････	5
3. Basic Policies Concerning Selection of Accounting Standards ･････････････････････････････････････････････	5

4. Consolidated Financial Statements and Primary Notes ･･････････････････････････････････････････････････

1. Consolidated Balance Sheets ･･････････････････････････････････････････････････････････････････
2. Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ･･････････････････････

Consolidated Statement of Income ･･････････････････････････････････････････････････････････････

Consolidated Statement of Comprehensive Income ･･････････････････････････････････････････････････

1. Consolidated Statement of Changes in Equity ･･････････････････････････････････････････････････････
2. Consolidated Statement of Cash Flows ･･･････････････････････････････････････････････････････････
3. Notes to Consolidated Financial Statements ････････････････････････････････････････････････････････
   (Note on the Assumption as a Going Concern) ･････････････････････････････････････････････････････
   (Significant Items Underlying the Preparation of Consolidated Financial Statements) ･･････････････････････････
   (Changing in Accounting Policy) ･･･････････････････････････････････････････････････････････････
   (Additional Information) ･････････････････････････････････････････････････････････････････････
   (Consolidated Balance Sheets) ･･･････････････････････････････････････････････････････････････
   (Consolidated Statement of Income) ････････････････････････････････････････････････････････････
   (Segment Information, etc.) ･･････････････････････････････････････････････････････････････････
   (Revenue Recognition) ･････････････････････････････････････････････････････････････････････
   (Per Share Information) ･････････････････････････････････････････････････････････････････････
   (Significant Subsequent Event) ･･･････････････････････････････････････････････････････････････

6

6

8

8

9

10

12

13

13

13

13

13

15

16

18

21

23

23

1

1. Overview of Business Results and Others

(1) Overview of Business Results for the Fiscal Year Ended March 31, 2023

During the fiscal year under review, the Japanese economy was affected primarily by the impact of soaring prices around the world due to the aggravation of the situation in Ukraine but showed signs of a gradual recovery as the normalization of economic and social activities advanced as people coexisted with COVID-19. Overseas, although some countries resumed economic activities in stages and the economy recovered gradually, falling demand and global economic downturn have become noticeable due to the monetary tightening .

Under such circumstances, the Environment Business saw almost the same shipments of automotive-related products with the previous fiscal year against the backdrop of the almost flat global sales quantity of light-vehicles and trucks despite restrictions on economic activities in China. In the Digital Society Business, shipments of components for semiconductor manufacturing equipment and electronic components, such as piezoceramic actuators for HDDs, declined primarily due to reduced investments in semiconductors and data centers. In the Energy & Industry Business, shipments mainly of insulators and industrial heating systems increased.

As a result, net sales for the fiscal year increased 9.6% year on year to ¥559,240 million thanks to the positive effect of the weak yen despite a decrease in the volumes of components for semiconductor manufacturing equipment and others. In terms of income, operating income fell 20.1% year-on-year to ¥66,761 million due to the impact of soaring labor costs, raw material and fuel prices associated with inflation, in addition to a decline in volumes, although there was the positive effect of the weak yen. Ordinary income decreased by 23.6% year-on-year to ¥65,887 million due to the lower operating income and loss on liquidation of subsidiary and associate. Net income attributable to owners of the parent decreased 22.3% to ¥55,048 million year-on-year mainly due to the recording of impairment loss associated with the optimization of production capacity in the Environment Business although income taxes-refund, etc. were recorded.

The results of the business segments are as follows.

[Environment Business Segment]

Sales in this segment were ¥320,787 million, up 9.6% from the previous fiscal year.

Sales in this segment increased due to the positive effect of the weak yen in addition to almost the same shipments with the previous fiscal year despite restrictions on economic activities in China.

Operating income was down 22.0% year-on-year to ¥ 50,728 million primarily due to the impact of soaring labor costs, raw material and fuel prices associated with inflation despite the positive effect of the weak yen.

[Digital Society Business Segment]

Sales in this segment were ¥163,192 million, up 8.6% from the previous fiscal year.

Sales in this segment increased due to the positive effect of the weak yen despite a decline in shipments of components for semiconductor manufacturing equipment, piezoceramic actuators for HDDs and others mainly resulting from the restraint on investments in semiconductors and data centers.

Operating income decreased 11.6% year-on-year to ¥ 17,557 million primarily due to a decrease in shipment volume and an increase of depreciation.

[Energy & Industry Business Segment]

Sales in this segment were ¥77,768 million, up 11.3% from the previous fiscal year.

Shipments of insulators increased mainly due to brisk demand in North America and Australia, despite continued restraint in capital investment by domestic electric power companies. Shipments of NAS® batteries rose, mainly in Japan. Shipments of industrial processes increased, centered on industrial heating systems for lithium-ion battery cathode materials.

2