Sumitomo Riko : Financial Results for 3rd Quarter of FY2020

Financial Results for 3rd Quarter of FY2020 February 2, 2021

Sumitomo Riko Company Limited

1. Consolidated Statements 〔IFRS〕 (from April 1, 2020 to December 31, 2020)

1) Consolidated Profit/loss			(100 millions of yen)
	Q3 FY2019	Q3 FY2020	Year on year
	(Nine-month period)	(Nine-month period)	grow th
Net sales	3,420	2,838	-583	-17.0%
Business profit	88	7	-81	-92.3%
Other income and expenses	△6	△50	-44	－
Operating profit	81	△44	-125	－
Financial income and expenses	△8	△7	+1	－
Profit before income taxes	73	△51	-124	－
Income tax expense	△55	△14	+41	－
Profit for the period	18	△65	-83	－
Profit attributable to ow ners of the parent company	7	△73	-79	－
Non-controlling interests	12	7	-4	-36.0%

(Note) Business profit is presented by subtracting Cost of sales and Selling, general and administrative expenses from Net sales, and by adding Equity in earnings/losses of associates.

2) Results by Business Segment			(100 millions of yen)
		Q3 FY2019	Q3 FY2020	Year on year
		(Nine-month period)	(Nine-month period)	grow th
	Automotive Products	2,983	2,451	-533	-17.8%
Net sales	General Industrial Products	437	387	-50	-11.4%
	Consolidated Total	3,420	2,838	-583	-17.0%
Business	Automotive Products	75	△6	-81	－
General Industrial Products	13	13	+0	+1.6%
profit
Consolidated Total	88	7	-81	-92.3%

(Note) From this fiscal year, the company has integrated its "Automotive Products" business by transferring Sealing rubber business from the "General Industrial Products" segment to the "Automotive Products" segment. The reportable segment for the previous fiscal year is prepared and disclosed based on this transfer/change.

3) Results by Geographical Segment			(100 millions of yen)
		Q3 FY2019	Q3 FY2020	Year on year
		(Nine-month period)	(Nine-month period)	grow th
	Japan	1,586	1,256	-330	-20.8%
	Americas	764	563	-201	-26.3%
Net sales	Asia	1,079	1,028	-51	-4.7%
Europe and Others	402	319	-84	-20.8%
	Eliminations or Corporate	△410	△327	+83	－
	Consolidated Total	3,420	2,838	-583	-17.0%
	Japan	11	△38	-48	－
	Americas	△3	△38	-35	－
Business	Asia	92	98	+6	+6.5%
profit	Europe and Others	△6	△15	-9	－
	Eliminations or Corporate	△7	△1	+6	－
	Consolidated Total	88	7	-81	-92.3%

(Note) Before elimination of intersegment transactions. Monetary amounts and percentage figures are rounded off to the nearest specified unit.

4) Exchange Rate (Average Rate)

	Q3 FY2019	Q3 FY2020	Year on year
	(Nine-month period)	(Nine-month period)	grow th
Yen/USD	108.68	106.12	-2.56	-2.4%
Yen/EUR	121.05	122.38	+1.33	+1.1%
Yen/RMB	15.60	15.44	-0.16	-1.0%
Yen/THB	3.53	3.39	-0.14	-4.0%
Yen/MXN	5.64	4.84	-0.80	-14.2%
Yen/BRL	27.16	19.73	-7.43	-27.4%

(Note) Monetary amounts and percentage figures are rounded off to the nearest specified unit.

2. Review of Financial Results

1. General Overview
2. • Due to countries stimulating their economies and the restart of economic activity that had stalled because of the impact of the novel coronavirus pandemic, the pace of recovery has been faster than expected, but consolidated performance in Q3 FY2020 recorded lower revenue due to sales that fell until Q2. Meanwhile, higher business profit in Asia and elsewhere, coupled with company-wide action to improve profitability, pushed business into the black.
   • Working toward a transformation into a stronger business structure capable of ensuring a profit even during slow operations, the group will continue endeavoring to strengthen earning power through business restructuring, further action to cut cost prices and reduce expenses, and other such measures.
3. Performance by Business Segment

Net sales 283.8 billion yen (down 17.0% YoY)

1. 1. Automotive Products 245.1 billion yen (down 17.8% YoY)
   • In Japan, revenue fell due to a decline in vehicle production volume and cooling consumer confidence attributable to the novel coronavirus pandemic.
   • In the Americas and Europe, although vehicle production recovered more than expected due to such factors as aggressive support for the economy, revenue decreased due to lower vehicle production.
   • In China, although revenue increased due to higher vehicle production by Japanese manufacturers attributable to such factors as an auto stimulus package, revenue was lower because of a decline in vehicle production in Asia as a whole.
   1. General Industrial Products 38.7 billion yen (down 11.4% YoY)
   • Functional parts for printers and copy machines experienced lower revenue due to lower demand for office printers and copy machines attributable to such factors as diversifying work environments.
   • Revenue for high-pressure hoses rose as production volume of construction equipment increased due to continued robust demand in China for public works projects funded by economic stimulus measures.
2. Business Profit 0.7 billion yen (down 92.3% YoY)
3. 1. Automotive Products -0.6 billion yen (compared to 7.5 billion yen in the same period last year)
   • Excluding China, profit fell due largely to lower sales until Q2.
   • In China, profit increased due to the effects of higher sales and action to improve profitability.
   1. General Industrial Products 1.3 billion yen (up 1.6% YoY)
   • Profits from printer and copy machine functional parts fell due to lower sales.
   • Profits from high-pressure hoses rose due to increased sales in China.

3. Revision to figures in FY2020 consolidated results forecast (from April 1, 2020 to March 31, 2021)

						Profit	Profit
				Profit		attributable to
				Profit	attributable
		Business	Operating	before	ow ners of
	Net sales	for	to ow ners of
	profit	profit	income	the parent
		the year	the parent
				taxes	company per
					company
						share (basic)
	100 millions	100 millions	100 millions	100 millions	100 millions	100 millions	Yen
	of yen	of yen	of yen	of yen	of yen	of yen
Previous forecast FY2020
(October 30)
Full year (A)	3,750	△20	△85	△95	△117	△125	△120.39
Revised forecast FY2020 (B)	4,000	50	△22	△32	△59	△71	△68.38
Changed amount (B-A)	+250	+70	+63	+63	+58	+54	+52.01
Prior period results (FY2019)	4,451	113	89	74	25	9	8.48

The market outlook remains uncertain due to such factors as lower demand resulting from the concerns over the spread of the novel coronavirus and the widening global shortage of semiconductors for auto parts. However, due to higher sales to automobile manufactures than we initially forecasted, we have revised consolidated forecasts for the full fiscal year, net sales and profit figures upward.