Furukawa Battery : Financial Results for the Nine-month Period December 31, 2021

Translation

Member of Financial Accounting Standards Foundation (FASF)

February 3, 2022

Consolidated Financial Results

for the Nine-month Period Ended December 31, 2021 [Japan GAAP]

Name of Company:	The Furukawa Battery Co., Ltd.
Stock Code:	6937
Stock Exchange Listing:	Tokyo Stock Exchange, First Section
URL:	https://www.furukawadenchi.co.jp
Representative
Title:	President & CEO
Name:	Shinichi Ono
Contact Person
Title:	Corporate Officer, General Manager of Finance &
	Accounting Department
Name:	Susumu Meida
Tel:	[phone]
Scheduled date for filing of quarterly securities report:	February 7, 2022
Scheduled date for commencement of dividend payment:	-
Supplementary documents for quarterly financial results:	None
Quarterly financial results briefing:	None
	(Yen in millions, rounded down)

1. Consolidated financial results for the nine months ended December 31, 2021 (April 1, 2021 - December 31, 2021)

(1) Consolidated operating results										(Percentage figures represent year on year changes)
		Net sales			Operating profit		Ordinary profit	Profit attributable to
					owners of parent
	Million yen		%		Million yen		%		Million yen	%	Million yen		%
Nine months ended December 31, 2021		43,155		3.2		1,455		(45.6)		1,580	(41.5)		1,299		(38.3)
Nine months ended December 31, 2020		41,812		(8.4)		2,674		54.3		2,701	53.5		2,105		52.6
Note: Comprehensive income
Nine months ended December 31, 2021:		1,171 million yen [yoy (35.2) %]
Nine months ended December 31, 2020:		1,809 million yen [yoy 134.3 %]
	Earnings per share		Earnings per share
		(basic)			(diluted)
					Yen				Yen
Nine months ended December 31, 2021		39.65					-
Nine months ended December 31, 2020		64.23					-
(2) Consolidated financial position
		Total assets		Net assets		Equity ratio
			Million yen		Million yen				%
As of December 31, 2021		57,865			31,743				52.7
As of March 31, 2021		57,686			31,388				52.2
Reference: Equity
As of December 31, 2021:	30,489 million yen
As of March 31, 2021:	30,109 million yen
2. Dividends
							Annual dividends per share
			End of Q1	End of Q2		End of Q3		End of Q4	Total
					Yen		Yen			Yen			Yen			Yen
Fiscal year ended March 31, 2021				-	-					-		22.00		22.00
Fiscal year ending March 31, 2022				-	-					-
Fiscal year ending March 31, 2022 (forecast)											22.00		22.00

Note: Revisions to the forecasts of dividends most recently announced: None

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2022 (April 1, 2021 - March 31, 2022)

(Percentage figures represent year-on-year changes)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Earnings
		owners of parent	per share
	Million		%	Million	%	Million		%	Million	%	Yen
	yen		yen	yen		yen
Fiscal year ending	63,000		5.1	3,300	(25.0)	3,300		(26.3)	3,450	(4.6)	105.25
March 31, 2022
Note: Revisions to the consolidated earnings forecasts most recently announced: Yes

Notes:

(1) Changes in significant subsidiaries during the nine-month period ended December 31, 2021 (Changes in specific subsidiaries accompanied by changes in the scope of consolidation): Newly included: None Excluded: None

1. Use of accounting methods that are specific to the preparation of the quarterly consolidated financial statements: Yes Note: For details, please refer to "2. Consolidated Financial Statements and Related Notes (3) Notes on Consolidated Financial Statements (Application of Special Accounting for Preparing Consolidated Financial Statements)" on page 8 of Attachment.
2. Changes in accounting policies, changes in accounting estimates, and retrospective restatements:
3. 1. Changes in accounting policies accompanying revisions in accounting standards: Yes
   2. Changes other than in (a): None
   3. Changes in accounting estimates: None
   4. Retrospective restatements: None
4. Number of shares outstanding (common stock)
5. 1. Shares outstanding (including treasury shares)

As of December 31, 2021: 32,800,000 shares	As of March 31, 2021:	32,800,000 shares
(b) Treasury shares
As of December 31, 2021: 22,134 shares	As of March 31, 2021:	22,086 shares

1. Average number of shares outstanding during the period (cumulative)

Nine months ended December 31, 2021:	Nine months ended December 31, 2020:
32,777,899 shares	32,777,930 shares

• Quarterly financial results reports are not required to be subjected to quarterly reviews conducted by certified public accountants or an audit corporation.
• Appropriate use of performance forecasts and other special items: (Disclaimer on forward-looking statements, etc.)
  Forward-looking statements in these materials are based on information available to management at the time this report was prepared, and on assumptions that management believes are reasonable. Actual results may differ significantly from these statements for a number of reasons. Please refer to "1. Qualitative Information on Consolidated Financial Results for the Nine- month Period (3) Explanation of Forecast for the Fiscal Year Ending March 31, 2022" on page 3 of Attachment for details on the assumptions used and other related matters concerning the forecast of consolidated financial results.

Index	of the Attachment
1. Qualitative Information on Consolidated Financial Results for the Nine-month Period ..........................................	2
(1)	Explanation of Operating Results ........................................................................................................................	2
(2)	Explanation of Financial Position ........................................................................................................................	2
(3)	Explanation of Forecast for the Fiscal Year Ending March 31, 2022...................................................................	3
2. Consolidated Financial Statements and Related Notes .............................................................................................	4
(1)	Consolidated Balance Sheets ...............................................................................................................................	4
(2)	Consolidated Statements of Income and Comprehensive Income .......................................................................	6
	(Consolidated Statements of Income (Cumulative)) ...........................................................................................	6
	(Consolidated Statements of Comprehensive Income (Cumulative)) .................................................................	7
(3)	Notes on Consolidated Financial Statements .......................................................................................................	8
	(Going Concern Assumptions) ............................................................................................................................	8
	(Material Changes in the Amount of Shareholders' Equity)................................................................................	8
	(Application of Special Accounting for Preparing Consolidated Financial Statements) .....................................	8
	(Changes in Accounting Policies) .......................................................................................................................	8
3. Other .......................................................................................................................................................................	10
(Trend in Quarterly Consolidated Results) ..............................................................................................................	10

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1. Qualitative Information on Consolidated Financial Results for the Nine-month Period

1. Explanation of Operating Results

(Business Environment)

During the nine-month period ended December 31, 2021, the global economy was expected to recover due to the gradual loosening of restrictions on economic activity caused by the impact of the novel coronavirus disease (COVID- 19), but the outlook is uncertain due to the spread of new COVID-19 variants and other factors.

Despite signs of moderate recovery due to the loosening of restrictions on economic activity caused by the impact of COVID-19 in the Japanese economy as well, the outlook continues to be uncertain due to supply-side restrictions and rising raw material prices in addition to the spread of new COVID-19 variants and other factors.

(Operating Results)

The Group recorded net sales of 43,155 million yen for the nine-month period ended December 31, 2021, an increase of 1,343 million yen (3.2%) year on year. Overseas sales were 14,336 million yen and accounted for 33.2% of total sales.

In terms of profit and loss, although sales were strong in the domestic market and Thailand market, operating profit decreased by 1,218 million yen year on year to 1,455 million yen and ordinary profit decreased by 1,121 million yen year on year to 1,580 million yen due to the rise in the price of major raw materials, such as lead.

Profit attributable to owners of parent came to 1,299 million yen, decreasing 805 million yen year on year. The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and relevant

revised ASBJ regulations have been applied from the beginning of the first quarter of the current fiscal year, and compared with the previous method, net sales for the first nine months of the current fiscal year decreased by 1,837 million yen, operating profit decreased by 111 million yen, and ordinary profit and profit before income taxes each decreased by 98 million yen. For details, please refer to "2. Consolidated Financial Statements and Related Notes (3) Notes on Consolidated Financial Statements (Changes in Accounting Policies)."

(2) Explanation of Financial Position

Total assets were 57,865 million yen as of December 31, 2021, which is 179 million yen more than at the end of the previous fiscal year. Current assets increased by 331 million yen from the end of the previous fiscal year to 29,354 million yen, while non-current assets decreased by 151 million yen from the end of the previous fiscal year to 28,511 million yen.

The main factors leading to the increase in current assets were increases in merchandise and finished goods and work in process.

There was a 564 million yen decrease in property, plant and equipment to 22,558 million yen. The main factor leading to the decrease was that the decline resulting from depreciation, etc. was greater than the increase in capital investment.

Investments and other assets increased by 148 million yen from the end of the previous fiscal year to 5,355 million yen.

Total liabilities as of December 31, 2021, decreased by 175 million yen from the end of the previous fiscal year to 26,122 million yen.

Current liabilities increased by 692 million yen from the end of the previous fiscal year to 15,380 million yen, and non-current liabilities decreased by 867 million yen from the end of the previous fiscal year to 10,741 million yen.

Interest-bearing debt, which is the sum of short-term borrowings and long-term borrowings, decreased by 386 million yen from the end of the previous fiscal year to 5,692 million yen.

Equity as of December 31, 2021, increased by 380 million yen from the end of the previous fiscal year to 30,489 million yen, resulting in an increase in the equity ratio from 52.2% at the end of the previous fiscal year to 52.7%.

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(3) Explanation of Forecast for the Fiscal Year Ending March 31, 2022

There have been changes to the consolidated forecast for the fiscal year ending March 31, 2022 from the consolidated forecast that was announced on May 12, 2021 based on results, etc. in the nine-month period ended December 31, 2021.

For details, please refer to the "Notice Regarding Revisions to Consolidated Forecast for the Fiscal Year Ending March 31, 2022" announced on February 3, 2022 (Japanese only).

Regarding the spread of COVID-19 and the timing of the settlement of COVID-19, etc., no changes have been made to the assumptions (that this situation will continue in the fiscal year ending March 31, 2022 and certain limits will be set regarding economic activity as there is no uniform opinion regarding the spread of COVID-19, the timing of the settlement of COVID-19, etc.) announced on May 12, 2021.

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