Tokyo Electron : Summary of Consolidated Financial Results for the First Quarter Ended June 30, 2022 (Japanese GAAP)

TOKYO ELECTRON

Summary of Consolidated Financial Results for the First Quarter Ended June 30, 2022

(Japanese GAAP)		August 8, 2022
Name of Listed Company:	Tokyo Electron Limited	Stock Exchange Listing: Tokyo
Security Code:	8035
URL:	https://www.tel.com
Representative:	Toshiki Kawai, Representative Director, President & CEO
Contact:	Akifumi Matsumura, Vice President of Accounting Dept.
	Telephone: [phone]

Scheduled start date of dividends payment: -

Preparation of supplementary materials for the quarterly financial results: Yes

Quarterly earnings release conference: Yes (for investors and analysts)

Note: Amounts are rounded down to the nearest million yen.

1. Consolidated Financial Results for the Three Months Ended June 30, 2022 (April 1, 2022 to June 30, 2022)

(1) Consolidated Operating Results (Cumulative)

Note: Percentages indicate changes from the same period of the previous fiscal year.

		Three months ended
		June 30, 2021	June 30, 2022
			%		%
Net sales (Millions of yen)		452,049	43.6	473,654	4.8
Operating income (Millions of yen)	141,791	92.0	117,519	(17.1)
Ordinary income (Millions of yen)	142,630	89.9	117,692	(17.5)
Net income attributable to owners of parent (Millions of yen)	100,363	77.8	88,095	(12.2)
Net income per share of common stock (Yen):
Basic		645.20		565.59
Diluted		641.70		562.98
Comprehensive income:	Three months ended June 30, 2022:	83,582 million yen, (24.5)%
	Three months ended June 30, 2021:	110,712 million yen,	60.1%

(2) Consolidated Financial Position

Total assets (Millions of yen) Total net assets (Millions of yen) Equity ratio (%)

Equity: 1,300,108 million yen (as of June 30, 2022) 1,335,152 million yen (as of March 31, 2022)

2. Dividends

As of
March 31, 2022	June 30, 2022
1,894,457	1,846,911
1,347,048	1,314,847
70.5	70.4

Year ended	Year ending
March 31, 2022	March 31, 2023
	(Forecast)

1Q-end dividends per share (Yen)	-	-
2Q-end dividends per share (Yen)	643.00	751.00
3Q-end dividends per share (Yen)	-	-
Year-end dividends per share (Yen)	760.00	927.00
Annual dividends per share (Yen)	1,403.00	1,678.00
Note: Revision to the dividends forecast most recently announced: None

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TOKYO ELECTRON

3. Financial Forecasts for the Year Ending March 31, 2023 (April 1, 2022 to March 31, 2023)

Note: Percentages for year ending March 31, 2023 indicate changes from the previous fiscal year, and those for six months ending September 30, 2022 indicate changes from the same period of the previous fiscal year.

	Six months ending	Year ending
	September 30, 2022	March 31, 2023
	(Cumulative)
		%		%
Net sales (Millions of yen)	1,100,000	18.0	2,350,000	17.3
Operating income (Millions of yen)	319,000	16.1	716,000	19.5
Ordinary income (Millions of yen)	319,000	14.8	716,000	19.0
Net income attributable to owners of parent (Millions of yen)	234,000	16.9	523,000	19.7
Net income per share (Yen)	1,502.29		3,357.63
Note: Revision to the financial forecasts most recently announced: None

Notes

1. Changes in significant subsidiaries during the period

(Changes in specified subsidiaries associated with changes in scope of consolidation): None

1. Adoption of special accounting methods for preparation of quarterly financial statements: Yes Please refer to "Notes" on page 11 for further information.
2. Changes in accounting policies, changes in accounting estimates and restatements
3. 1. Changes in accounting policies along with changes in accounting standards: None
   2. Other changes of accounting policies besides the number 1 above: None
   3. Changes in accounting estimates: None
   4. Restatements: None
4. Number of shares issued and outstanding (common stock)
5. 1. Number of shares issued and outstanding (including treasury stock)

	As of June 30, 2022:	157,210,911	shares
	As of March 31, 2022:	157,210,911	shares
2.	Number of shares of treasury stock
	As of June 30, 2022:	1,443,724	shares
	As of March 31, 2022:	1,461,581	shares
3.	Average number of shares outstanding (Cumulative quarterly period)
	Three months ended June 30, 2022:	155,756,620	shares
	Three months ended June 30, 2021:	155,555,388	shares

Note: The number of shares of treasury stock includes the Company's shares held by "Executive compensation Board Incentive Plan (BIP) trust" and "share-delivering Employee Stock Ownership Plan (ESOP) trust". (610,472 shares as of June 30, 2022, 610,529 shares as of March 31, 2022) In addition, these Company's shares are included in the treasury stock which is deducted in calculating the average number of shares.

* Status of implementation of quarterly review procedures

This Summary of Consolidated Financial Results is outside the scope of external auditor's quarterly review procedures under the Financial Instruments and Exchange Act.

* Explanation of the appropriate use of financial forecast:

The financial forecasts and estimates in this Summary of Consolidated Financial Results are based on information available to the Company at the time of report issuance and certain assumptions judged to be reasonable by the Company, and therefore are not guarantees of future performance. Consequently, actual results may differ substantially from those described in this Summary of Consolidated Financial Results. Please refer to "1. Qualitative Information on Financial Results for the Current Quarter (4) Description of Financial Estimates Information such as Consolidated Financial Forecasts" on page 6.

The Company plans to hold an online conference for investors and analysts on August 8, 2022. Supplementary materials to be used at the conference will be posted on the Company's website.

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TOKYO ELECTRON

1. Qualitative Information on Financial Results for the Current Quarter

(1) Description of Operating Results

With regard to the global economy in the first quarter of the current fiscal year, we have seen supply chains impacted by lockdowns in some regions due to the spread of COVID-19 pandemic, surging prices of natural resources due to heightened geopolitical risks, rises in the policy interest rates, mainly in the United States and Europe, and the impact of fluctuations in exchange rates. In the electronics industry, where the Tokyo Electron (TEL) Group operates, semiconductor production equipment market is expected to grow in medium- to long-term due to the growing importance of semiconductors, driven by the transition to a data society due to the expansion of communications technologies and efforts toward realizing a decarbonized society.

Under these circumstances, the consolidated financial results (cumulative) for the first quarter of the current fiscal year were net sales of 473,654 million yen (year-on-year growth of 4.8%), operating income of 117,519 million yen (year- on-year decrease of 17.1%), ordinary income of 117,692 million yen (year-on-year decrease of 17.5%), and net income attributable to owners of parent of 88,095 million yen (year-on-year decrease of 12.2%).

The overview of each business segment is as described below.

(i) Semiconductor Production Equipment

Capital investment in semiconductors for logic/foundry has been made in a wide range of areas, from cutting-edge to mature generations of semiconductors, driven by the digitalization of society. Additionally, capital investments in both DRAM and NAND flash memory remained steady. Consequently, net sales to external customers in this segment for the first quarter of the current fiscal year were 464,003 million yen (year-on-year growth of 6.0%).

(ii) Flat Panel Display (FPD) Production Equipment

As capital investment for large-sized LCD panels for televisions has run its course, the overall manufacturing equipment market for FPD TFT arrays has slowed. Meanwhile, capital investments in small and medium-sized OLED panels continue in conjunction with displays installed in end products being converted from LCD panels to OLED panels. Consequently, net sales to external customers in this segment for the first quarter of the current fiscal year were 9,614 million yen (year-on-year decrease of 31.8%).

(iii) Other

Net sales to external customers in this segment for the first quarter of the current fiscal year were 36 million yen (year- on-year growth of 2.4%).

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TOKYO ELECTRON

(For reference䠅
Consolidated Operating Results							(Millions of yen)
					FY 2022							FY 2023
					Full Year	1Q	2Q	3Q	4Q			1Q
Net Sales	2,003,805		452,049	480,464	506,474	564,817			473,654
	Semiconductor Production Equipment	1,943,843		437,924	467,838	488,802	549,278			464,003
		Japan	228,902		54,861	53,965	63,147	56,927			42,022
		North America	268,065		43,911	61,897	76,893	85,363	67,325
		Europe	107,954		13,411	20,309	17,062	57,170	56,526
		South Korea	377,767		95,304	93,507	93,040	95,914	85,172
		Taiwan	359,225		62,853	102,548	87,494	106,330	96,816
		China	513,529		153,684	108,825	132,217	118,803	94,086
		Southeast Asia, and Others	88,398		13,897	26,785	18,946	28,768	22,055
	FPD Production Equipment			59,830		14,090	12,592	17,640	15,507			9,614
	Other			131		35	32	32	31			36
Operating Income	599,271		141,791	132,855	156,044	168,579	117,519
Ordinary Income		601,724		142,630	135,131	155,618	168,344			117,692
Net Income Attributable to Owners of Parent		437,076		100,363	99,856	110,026	126,830			88,095

Note: Intersegment sales or transfers are eliminated.

(2) Description of Financial Conditions

Current assets at the end of the first quarter of the current fiscal year were 1,359,969 million yen, a decrease of 48,734 million yen compared to the end of the previous fiscal year. This was mainly due to a decrease of 79,273 million yen in prepaid consumption tax, a decrease of 51,999 million yen in short-term investments included in securities, and an increase of 83,361 million yen in inventories.

Tangible fixed assets increased by 15,264 million yen from the end of the previous fiscal year, to 238,342 million yen. Intangible fixed assets increased by 2,062 million yen from the end of the previous fiscal year, to 24,603 million yen. Investments and other assets decreased by 16,139 million yen from the end of the previous fiscal year, to 223,996 million yen.

As a result, total assets decreased by 47,546 million yen from the end of the previous fiscal year, to 1,846,911 million yen.

Current liabilities decreased by 18,663 million yen from the end of the previous fiscal year, to 449,915 million yen. This was largely due to a decrease of 70,284 million yen in income taxes payable, and an increase of 52,674 million yen in customer advances.

Long-term liabilities increased by 3,318 million yen from the end of the previous fiscal year, to 82,147 million yen. Net assets decreased by 32,201 million yen from the end of the previous fiscal year, to 1,314,847 million yen. This was largely due to a decrease resulting from the payment of 118,833 million yen in year-end dividends for the previous fiscal year, and an increase of 88,095 million yen resulting from recording net income attributable to owners of parent. As a result, the equity ratio was 70.4%.

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TOKYO ELECTRON

(3) Description of Cash Flows

Cash and cash equivalents at the end of the first quarter of the current fiscal year decreased by 56,788 million yen compared to the end of the previous fiscal year, to 278,859 million yen. The combined balance including 35,742 million yen in time deposits and short-term investments with maturities of more than three months that are not included in cash and cash equivalents was 314,601 million yen, a decrease of 56,672 million yen from the end of the previous fiscal year. The overall situation regarding cash flows during the first quarter of the current fiscal year was as described below.

Cash flows from operating activities were positive 69,987 million yen, a decrease of 41,301 million yen compared to the same period of the previous fiscal year. The major positive factors were 117,642 million yen in income before income taxes, a 79,408 million yen decrease in prepaid consumption tax, and a 51,500 million yen increase in customer advances. The major negative factors were 100,865 million yen in payment of income taxes, and a 75,364 million yen increase in inventories.

Cash flows from investing activities were negative 16,667 million yen compared to negative 10,762 million yen in the same period of the previous fiscal year. This was largely due to the payment of 13,405 million yen for the purchase of tangible fixed assets.

Cash flows from financing activities were negative 119,150 million yen compared to negative 65,981 million yen in the same period of the previous fiscal year. This was largely due to the payment of 118,833 million yen in dividends.

	Consolidated Statements of Cash Flows (Summary)					(Millions of yen)
					Three months ended		Three months ended
					June 30, 2021		June 30, 2022
	Cash flows from operating activities	111,289	69,987
		Income before income taxes	138,033		117,642
		Depreciation and amortization	7,934	9,724
		Net decrease (increase) in notes and accounts receivable - trade,	(24,600)	16,837
		and contract assets
		Decrease (increase) in inventories	(20,578)	(75,364)
		Increase (decrease) in trade notes and accounts payable	(784)	(10,656)
		Other, net	11,285	11,804
	Cash	flows from investing activities	(10,762)	(16,667)
		Decrease (increase) in time deposits and short-term investments			4,955		(66)
		Other (Acquisition of fixed assets, and others)	(15,718)	(16,601)
	Cash flows from financing activities	(65,981)	(119,150)
	Effect of exchange rate changes on cash and cash equivalents	587	9,042
	Net increase (decrease) in cash and cash equivalents	35,133	(56,788)
	Cash and cash equivalents at beginning of period	265,993	335,648
	Cash and cash equivalents at end of period	301,126	278,859
	Cash and cash equivalents, time deposits and short-term investments		341,742	314,601
	with maturities of more than three months

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