Consolidated Financial Highlights for the Second Quarter ended September 30, 2021 [under Japanese GAAP]

November 12, 2021

Consolidated Financial Highlights for the Second Quarter ended September 30, 2021 [under Japanese GAAP]

Company name :	SMC Corporation
Stock exchange listing :	Tokyo Stock Exchange First Section
Security code :	6273
URL :	https://www.smcworld.com/ir/en/
Representative :	Yoshiki Takada,	President
Contact person :	Masahiro Ota,	Director and Executive Officer
Projected date of filing quarterly report :		November 12, 2021
Projected starting date of dividend payment :	December 1, 2021

1. Consolidated Financial Highlights for the Second Quarter ended September 30, 2021 (April 1, 2021 to September 30, 2021)

(1) Consolidated Operating Results								(Millions of yen)
Second Quarter	Net sales	Operating profit		Ordinary profit	Profit attributable to
ended September 30		owners of parent
2021	358,691	42.3%	118,035	81.5%		126,074	84.7%	90,269	95.0%
2020	251,993	(4.7%)	65,045	(11.5%)		68,272	(6.4%)	46,281	(13.7%)
(Note) Comprehensive income 2Q ended September 30, 2021 :	¥	98,966 million	75.8％
	2Q ended September 30, 2020 :	¥	56,281 million	535.4％
					(Yen)
Second Quarter	Net income	Net income per share
ended September 30	per share	(diluted basis)
2021	1,366.16	−
2020	695.78	−

(2) Consolidated Financial Positions								(Millions of yen)
	Total assets					Net assets	Equity ratio
September 30, 2021	1,636,467					1,458,872			88.9%
March 31, 2021	1,539,871					1,379,987			89.4%
(Reference) Shareholders' equity As of September 30, 2021 :	¥	1,455,452 million
	As of March 31, 2021 :	¥	1,376,704 million
2. Dividends										(Yen)
For the year					Dividend per share
ended March 31	1Q		2Q			3Q		4Q	Total
2021 (Actual)	−		200.00			−		300.00	500.00
2022 (Actual)	−		300.00			NA		NA	NA
2022 (Projected)	NA		NA			−		300.00	600.00

(Note)

Revision of dividends forecast during this period :

None

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SMC Corporation

3. Forecasts of Consolidated Operating Results for the Year ending March 31, 2022

(Millions of yen, except per share figures)

								Profit	Net income
		Net sales	Operating profit	Ordinary profit	attributable to	per share
								owners of parent	(Yen)
Year ending	700,000	26.8%	218,000	42.2%	228,000	32.7%	163,000	33.8%	2,466.89
March 31, 2022
(Note)	Revision of forecasts of operating results during this period : Yes

• Notes

1. Changes in significant subsidiaries during the second quarter ended September 30, 2021 : None
2. Adoption of special accounting methods for presenting quarterly consolidated financial statements : Yes
3. Changes in accounting policies, changes in accounting estimates and retrospective restatement

1. Changes in accounting policies applied due to revisions of accounting standards : Yes
2. Changes in accounting policies other than the above : None
3. Changes in accounting estimates : None
4. Retrospective restatement : None

1. Number of shares issued

1. Number of common shares issued (including treasury shares)

	As of September 30, 2021	67,369,359
	As of March 31, 2021	67,369,359
2. Number of treasury shares
	As of September 30, 2021	1,294,197
	As of March 31, 2021	1,294,348
3. Average number of common shares for the six months ended
	April 1, 2021 to September 30, 2021	66,075,009
	April 1, 2020 to September 30, 2020	66,517,609

(Note) The company's shares held by the Board Benefit Trust (BBT) for the Directors' Stock Compensation Plan (3,000 shares as of September 30, 2020 and as of March 31, 2021, and 2,600 shares as of September 30, 2021) is included in the number of treasury shares, which is excluded in the calculation for the above: 2. Number of treasury shares and 3. Average number of common shares for the six months ended.

These quarterly consolidated financial highlights are not subject to quarterly review procedures by the independent accounting auditor.

Explanation of appropriate use of financial forecasts; other special items

1. The revised forecasts of operating results for the fiscal year ending March 31, 2022 (consolidated) are shown in this release.
2. Forecasts are based on information and certain premises that the Company considers to be reasonable at the time these consolidated quarterly financial highlights are released.
   Some factors could cause actual results to differ from expectations.

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SMC Corporation

1. Qualitative Information about the Quarterly Results

(1) Operating Results

During the period up to the second quarter of the fiscal year 2021 (from April 1, 2021 to September 30, 2021), the global economy and the capital investment demands within a wide range of industries have seen recoveries along with the Coronavirus (COVID-19) vaccine roll out. However, a high degree of future uncertainty still remains with the re-expansion of the new virus mutations, shortages of semi-conductors, inflation in the prices for raw material, logistics stagnations, power supply shortages in China, and other various issues.

The demands for automatic control equipment within the semi-conductor industry remained high in China and in other regions like Japan, North America, Europe, and in Asia. Even though production was affected by the shortages of semi-conductors, the automotive and machine tools performed well in general with capital expenditure investments. Also, the food and medical equipment industries remained strong overall within the market, with new demands for labor-savings and factory automation.

Within these business environment, even though the SMC group's production was slightly affected by part shortages, with the incorporation of BCP (Business Continuity Plan) initiatives, SMC has put forth an effort in maintaining and expanding its product supply capabilities. The Group has also continued to develop new products that are smaller, lighter, and offer more significant energy-saving features. In addition, the Group has continued to aggressively promote these products through its global sales network.

As a result, the consolidated net sales for the Group were 358,691 million yen (increased by 42.3% from the previous corresponding period) and operating profit was 118,035 million yen (increased by 81.5%) due to the revenue increase. Despite the decrease in interest income, with an impact from the depreciation of the yen against the US dollar (which was an appreciation of yen against the US dollar in the previous corresponding period), ordinary profit was 126,074 million yen (increased by 84.7%), profit before income taxes was 125,826 million yen (increased by 85.5%), and profit attributable to owners of parent was 90,269 million yen (increased by 95.0%).

ROE became 6.4%, increased by 2.8 points from the previous corresponding period.

(2) Financial Positions

Total assets as of the end of the second quarter of the fiscal year 2021 were 1,636,467 million yen, a 96,596 million yen increase from the previous fiscal year end. Cash and deposits were 657,270 million yen, a 27,979 million yen increase from the previous fiscal year end due to the increase in profit. Notes and accounts receivable- trade were 194,121 million yen, a 19,187 million yen increase resulted from the increase in revenue. With the increased retained earnings, the Company applied increased cash and deposits for aggressive capital expenditures and land acquisition for the construction of the new head office to further enhance the Group's administration functions, resulted in an increase in property, plant and equipment which was 240,065 million yen, a 41,524 million yen increase from the previous fiscal year end.

Total liabilities were 177,595 million yen, increased by 17,712 million yen from the previous fiscal year end. Notes and accounts payable-trade were 53,534 million yen, a 9,442 million yen increase from the previous fiscal year end, resulted from the increase in revenue.

Total net assets were 1,458,872 million yen, increased by 78,884 million yen from the previous fiscal year end, due to the increases in retained earnings resulted from the increase in profit.

Equity ratio became 88.9%.

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SMC Corporation

(3) Consolidated Forecasts and Other Forward-Looking Information

Since the demands in the semiconductor related industries are increasing at a pace far exceeding the Company's expectations, revisions to the consolidated forecast for the fiscal year 2021, announced in the "Notice on the Revision to the Financial Forecasts" issued on August 11, 2021 are made as below.

The average exchange rates for the fiscal year as a premise of the revised forecasts have not changed:

1 US$ = 109 yen, 1 EUR = 130 yen and 1 CNY = 17 yen.

Revision to consolidated financial forecasts for the fiscal year ending March 31, 2022

(Period from April 1, 2021 through March 31, 2022)

	Net Sales	Operating	Ordinary	Profit attributable	Net Income
	Profit	Profit	to owners of parent	per share
Previous Forecasts (A)	(Millions of Yen)	(Millions of Yen)	(Millions of Yen)	(Millions of Yen)	(Yen)
680,000	200,000	210,000	150,000	2,270.15
Revised Forecasts (B)	700,000	218,000	228,000	163,000	2,466.89
Increased / Decreased Amount	20,000	18,000	18,000	13,000	−
(B-A)
Rate of Change (%)	2.9	9.0	8.6	8.7	−
Results of the FY 2020	552,178	153,355	171,827	121,790	1,831.98
(Year ended March 31, 2021)

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SMC Corporation

2. Quarterly Consolidated Financial Statements

(1) Quarterly Consolidated Balance Sheet

			(Millions of yen)
		Year end	Second Quarter end
		-Previous year	-Current year
		As of March 31, 2021 As of September 30, 2021
	[ASSETS]
	Current assets
	Cash and deposits	629,291	657,270
	Notes and accounts receivable-trade	174,934	194,121
	Securities	11,256	11,289
	Merchandise and finished goods	112,131	115,671
	Work in process	21,314	22,502
	Raw materials and supplies	115,306	118,596
	Other	33,470	26,756
	Allowance for doubtful accounts	(751)	(692)
	Total current assets	1,096,953	1,145,517
	Non-current assets
	Property, plant and equipment
	Buildings and structures, net	81,450	87,785
	Machinery, equipment and vehicles, net	38,515	40,544
	Land	38,812	68,757
	Other, net	39,761	42,978
	Total property, plant and equipment	198,540	240,065
	Intangible assets	11,389	13,588
	Investments and other assets
	Investment securities	72,383	72,696
	Insurance funds	145,373	149,423
	Other	16,719	16,707
	Allowance for doubtful accounts	(1,488)	(1,531)
	Total investments and other assets	232,987	237,296
	Total non-current assets	442,917	490,950
	Total assets	1,539,871	1,636,467

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SMC Corporation