Roland : Quarterly Securities Report For the Second Quarter of the 51th Fiscal Year

Quarterly Securities Report

For the Second Quarter of the 51st Fiscal Year

(April 1, 2022 through June 30, 2022)

Roland Corporation

1. This is an English translation of the Quarterly Securities Report (Shihanki Hokokusho), which was produced based on Article 24-4-7, Paragraph 1 of the Financial Instruments and Exchange Act of Japan and was filed via the Electronic Disclosure for Investors' NETwork (EDNET) system as set forth in Article 27-30-2 of the same act. The translation includes a table of contents and pagination that are not included in the electronic filing.
2. Appended to the back of this document are English translations of the independent auditors' Quarterly Review Report attached to the Quarterly Securities Report when it was filed using the aforementioned method, and the Confirmation Note that was filed at the same time as the Quarterly Securities Report.
3. 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.

	Table of Contents
		Page
Quarterly Securities Report for the Second Quarter of the 51st Fiscal Year
Cover ........................................................................................................................................................................................................	3
Section 1 Company Information ............................................................................................................................................................	4
Item 1. Overview of Company ...........................................................................................................................................................	4
1.	Key Financial Data .................................................................................................................................................................	4
2.	Description of Business ..........................................................................................................................................................	4
Item 2. Overview of Business .............................................................................................................................................................	5
1.	Business Risks ........................................................................................................................................................................	5
2.	Management's Discussion and Analysis of Financial Position, Operating Results and Cash Flows ......................................	5
3.	Material Contracts, etc. ...........................................................................................................................................................	7
Item 3. Information about Reporting Company ..............................................................................................................................	8
1.	Company's Shares, etc............................................................................................................................................................	8
2.	Directors and Other Officers.................................................................................................................................................	11
Item 4. Financial Information .........................................................................................................................................................	12
1.	Quarterly Consolidated Financial Statements, etc.................................................................................................................	13
2.	Other information .................................................................................................................................................................	21
Section 2 Information about Reporting Company's Guarantor, etc..............................................................................................	22
Independent Auditor's Quarterly Review Report
Confirmation Note

Cover

Document title	Quarterly Securities Report
Clause of stipulation	Article 24-4-7, Paragraph 1 of the Financial Instruments and Exchange Act
Place of filing	Director, Kanto Local Finance Bureau
Filing date	August 9, 2022
Quarterly accounting period	The second quarter of the 51st fiscal year (April 1, 2022 through June 30, 2022)
Company name	Roland Kabushiki Kaisha
Company name in English	Roland Corporation
Title and name of representative	Gordon Raison, CEO and Representative Director
Address of registered headquarters	2036-1 Nakagawa, Hosoe-cho,Kita-ku,Hamamatsu-shi, Shizuoka
Telephone number	[phone]
Name of contact person	Shunsuke Sugiura, CFO and Director
Nearest place of contact	2036-1 Nakagawa, Hosoe-cho,Kita-ku,Hamamatsu-shi, Shizuoka
Telephone number	[phone]
Name of contact person	Shunsuke Sugiura, CFO and Director
Place for public inspection	Tokyo Stock Exchange, Inc.
	(2-1 Nihonbashi Kabutocho, Chuo-ku, Tokyo)

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Section 1 Company Information

Item 1. Overview of Company

1. Key Financial Data

1. Key financial data

Fiscal year			50th	51st	50th
		First Half	First Half
Accounting period			(January 1, 2021 through	(January 1, 2022 through	(January 1, 2021 through
		June 30, 2021)	June 30, 2022)	December 31, 2021)
Net sales	(million yen)	43,030		43,004		80,032
Ordinary profit	(million yen)	7,456		4,794		10,102
Profit attributable to owners of parent	(million yen)	6,179		3,927		8,586
Comprehensive income	(million yen)	7,611		7,976		11,361
Net assets	(million yen)	26,807		32,788		28,656
Total assets	(million yen)	50,388		62,777		52,807
Basic earnings per share	(yen)	225.71		143.08		312.73
Diluted earnings per share	(yen)	220.44		140.80		306.26
Equity-to-asset ratio	(%)		52.7		51.8		53.7
Net cash provided by (used in)	(million yen)	4,229		(910)		4,929
operating activities
Net cash provided by (used in)	(million yen)	(229)		(443)		(803)
investing activities
Net cash provided by (used in)	(million yen)	(3,246)		1,342		(6,071)
financing activities
Cash and cash equivalents	(million yen)	11,497		8,722		8,781
at end of period
Fiscal year			50th		51st
		Second Quarter		Second Quarter
Accounting period			(April 1, 2021 through		(April 1, 2022 through
		June 30, 2021)		June 30, 2022)
Basic earnings per share	(yen)		100.38		73.67

Notes: 1. Non-consolidated financial data are not presented as the Company prepares quarterly consolidated financial statements.

1. Basic earnings per share and diluted earnings per share are computed using the average number of shares of common stock during the period, which is calculated by subtracting the number of treasury shares from these shares. These treasury shares include the treasury shares remaining in Board Benefit Trust, Employee Stock Ownership Plan Trust and Employee Shareholding Association-type ESOP Trust.
2. The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) from the beginning of the fiscal year ending December 31, 2022. Accordingly, the key financial data for the fiscal year ending December 31, 2022 are those after applying the said accounting standard.

2. Description of Business

There were no significant changes in the business in which the Company and its subsidiaries and affiliates (collectively, the "Group") operate during the six months ended June 30, 2022. No changes were made to major subsidiaries and affiliates.

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Item 2. Overview of Business

1. Business Risks

During the six months ended June 30, 2022 (hereinafter the "period under review"), among the matters related to Overview of Business and Financial Information stated in this Quarterly Securities Report, no major risks that might have a material impact on the financial position, operating results and cash flows of the Group have been recognized by the management. There were no significant changes in the matters related to "Business and other risks" stated in the Annual Security Report for the previous fiscal year.

2. Management's Discussion and Analysis of Financial Position, Operating Results and Cash Flows

This document contains forward-looking statements, which are based on the Group's estimates and assumptions made as of the end of the period under review.

The Company has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29 of March 31, 2020; hereinafter, referred as the "Accounting Standard for Revenue Recognition") since the beginning of the fiscal year ending December 2022 .

Under the Accounting Standard for Revenue Recognition, sales discounts, which were previously recognized in non-operating expenses, have been reclassified as deductions from net sales. With this change in our accounting standard, net sales and operating profit have declined, whereas ordinary profit, profit attributable to owners of parent, and cash flows have remained unaffected.

Figures for the period under review as referred to in "Business performance" below represent the results after the application of the Accounting Standard for Revenue Recognition. Therefore, direct year-on-year comparisons of these figures are not presented. Instead, for better understanding of the operating performance for the period under review, year-on-year after adjustment are presented, which are percentages calculated based on the assumption that the results for the period under review had been measured by the same accounting standard as used in the fiscal year ended December 31, 2021.

1. Business performance
   During the period under review, while new COVID-19 cases were contained to some extent and social and economic activities were on a recovery track, the Group went through various obstacles in the external environment, including ongoing difficulties in purchasing semiconductors, soaring material and ocean freight costs, in addition the disruption of supply chains triggered by China's lockdown and the prolonged Russia-Ukraine conflict.
   In the electronic musical instruments business hemisphere, compared to the pre-pandemic era, sales standards went on to become a further solid position endorsed by the entrenched new lifestyle brought by the COVID-19 pandemic. On the supply side, although the supply-demand balance of raw materials remained tight, continued efforts such as prompt management decisions for securing the necessary materials contributed to the anticipated overall factory utilization level. Also, order backlog was progressed favorably. Meanwhile, on the cost side, as several difficult conditions, such as lingering high ocean transportation costs and raw materials prices persisted, the Group has focused on to optimize its product prices. At the same time, it reallocated the declined sales opportunities in China and Russia to other regions in response to these unfavorable conditions.
   As a result of the above, during the period under review, the Group recorded net sales of ¥43,004 million (up 5.9% compared to Forecast, up 1.0% year on year after adjustment), operating profit of ¥4,677 million (up 1.7% compared to Forecast, down 34.8% year on year after adjustment), ordinary profit of ¥4,794 million (up 2.0% compared to Forecast, down 35.7% year on year), and profit attributable to owners of parent of ¥3,927 million (up 12.2% compared to Forecast, down 36.5% year on year). Whereas the forecast target was achieved, year on year profit was dropped. This is primarily attributable to the fact that a one-time sales increment (approximately ¥2 billion), associated with the inventory management implemented at the end of the fiscal year ended December 31, 2020 was recorded in the previous year.
   Sales performance by mainstay category is as shown below:
   (Keyboards) Net sales: ¥13,761 million (up 5.5% year on year after adjustment)
   Among the mainstay categories, electronic pianos remained in stronger demand compared to the pre-pandemic era driven by brisk demand from people staying home for longer hours. Demand for this category continued to remain steady as order backlog reduction caused by stronger shipments, which was also the case among competitors, and the market competitiveness was gradually returning to normal position as compared to the one before the outbreak of the COVID-19 pandemic.

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