Furukawa Battery : Financial Results for the Nine-month Period Ended December 31, 2020

Translation

Member of Financial Accounting Standards Foundation (FASF)

February 4, 2021

Consolidated Financial Results for the Nine-month Period Ended December 31, 2020 [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 5, 2021
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, 2020 (April 1, 2020 - December 31, 2020)

(1) Consolidated operating results

(Percentage figures represent year on year changes)

Net sales	Operating profit	Ordinary profit	Profit attributable to owners of parent
Nine months ended December 31, 2020 Nine months ended December 31, 2019	Million yen 41,812 45,669	% (8.4) (0.9)	Million yen 2,674 1,732	% 54.3 (2.6)	Million yen 2,701 1,760	% 53.5 (0.4)	Million yen 2,105 1,379	% 52.6 (6.5)

Note: Comprehensive income

Nine months ended December 31, 2020: Nine months ended December 31, 2019:

1,809 million yen [yoy 134.3 %] 772 million yen [yoy 16.2 %]

Earnings per share (basic)	Earnings per share (diluted)
Nine months ended December 31, 2020 Nine months ended December 31, 2019	Yen 64.23 42.09	Yen － －

(2) Consolidated financial position

Total assets	Net assets	Equity ratio
As of December 31, 2020 As of March 31, 2020	Million yen 54,941 54,035	Million yen 29,022 27,637	% 50.9 49.1

Reference: Equity

As of March 31, 2020:As of December 31, 2020:

27,955 million yen 26,504 million yen

2. Dividends

Annual dividends per share
End of Q1	End of Q2	End of Q3	End of Q4	Total
Fiscal year ended March 31, 2020 Fiscal year ending March 31, 2021	Yen － －	Yen － －	Yen － －	Yen 13.00	Yen 13.00
Fiscal year ending March 31, 2021 (forecast)	15.00	15.00

Note: Revisions to the forecasts of dividends most recently announced: Yes

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2021 (April 1, 2020 - March 31, 2021)

(Percentage figures represent year-on-year changes)

Net sales	Operating profit	Ordinary profit	Profit attributable to owners of parent	Earnings per share
Fiscal year ending March 31, 2021	Million yen 60,800	% (5.7)	Million yen 3,800	% 15.4	Million yen 3,800	% 17.4	Million yen 2,900	% 29.5	Yen 88.47

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, 2020 (Changes in specific subsidiaries accompanied by changes in the scope of consolidation): Newly included: None Excluded: None

• (2) 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.

• (3) Changes in accounting policies, changes in accounting estimates, and retrospective restatements:

  • (a) Changes in accounting policies accompanying revisions in accounting standards: None

  • (b) Changes other than in (a): None

  • (c) Changes in accounting estimates: None

  • (d) Retrospective restatements: None

• (4) Number of shares outstanding (common stock)

  • (a) Shares outstanding (including treasury shares)

As of December 31, 2020: 32,800,000 shares

As of March 31, 2020: 32,800,000 shares

• (b) Treasury shares

  As of December 31, 2020: 22,086 shares

  As of March 31, 2020: 22,059 shares

• (c) Average number of shares outstanding during the period (cumulative)Nine months ended December 31, 2020: 32,777,930 shares

Nine months ended December 31, 2019: 32,777,941 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, 2021" 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, 2021 ................................................................... 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

(Additional Information) ..................................................................................................................................... 8

3. Other ......................................................................................................................................................................... 9

(Trend in Quarterly Consolidated Results) ................................................................................................................ 9

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, 2020, the global economy has been in an extremely serious situation due to the impact of the global outbreak of the novel coronavirus disease (COVID-19), but there have been some signs of picking up.

Despite the continuation of this extremely serious situation due to the impact of COVID-19, the Japanese economy is expected to continue to pick up due to the effects of various policy measures and the improvement of the overseas economy.

The Furukawa Battery Group flexibly implemented measures to prevent the spread of infection, such as telework, and worked for the continuation of business, although there were signs of turmoil in the supply chains of various industries due to the spread of COVID-19.

(Operating Results)

The Group recorded consolidated sales of 41,812 million yen for the nine-month period ended December 31, 2020, a decrease of 3,857 million yen (8.4%) year on year. Overseas sales were 13,852 million yen and accounted for 33.13% of total sales.

With regard to profit and loss, sales for replacement demand remained strong, despite sluggish sales to automobile manufacturers in the Japanese market and in the Thai market due to the stagnation of economic activity caused by COVID-19. Furthermore, profit improved at the Indonesia subsidiary due to the improvement of profitability and other factors, despite a decrease in sale amounts. As a result of the above, operating profit increased by 941 million yen year on year to 2,674 million yen, and ordinary profit increased by 941 million yen year on year to 2,701 million yen.

Profit attributable to owners of parent came to 2,105 million yen, increasing 725 million yen year on year.

(2) Explanation of Financial Position

Total assets were 54,941 million yen as of December 31, 2020, which is 905 million yen more than at the end of the previous fiscal year. Current assets increased by 1,855 million yen from the end of the previous fiscal year to 26,994 million yen, while non-current assets decreased by 949 million yen to 27,946 million yen.

The main factor leading to the increase in current assets was an increase in cash and deposits.

There was a 1,579 million yen decrease in property, plant and equipment to 22,874 million yen. The main factors leading to the decrease were that the decline resulting from depreciation, etc. was greater than the increase in capital investment, and foreign currency translation differences of non-current assets owned by overseas subsidiaries.

Investments and other assets increased by 475 million yen to 4,782 million yen.

Total liabilities as of December 31, 2020, decreased by 479 million yen to 25,919 million yen.

Current liabilities decreased by 1,008 million yen to 13,846 million yen, and non-current liabilities increased by 528 million yen to 12,072 million yen.

Interest-bearing debt, which is the sum of short-term borrowings and long-term borrowings, decreased by 159 million yen to 6,569 million yen.

Equity increased by 1,451 million yen to 27,955 million yen, resulting in an increase in the equity ratio from 49.1% at the end of the previous fiscal year to 50.9% at the end of the nine-month period.