Toshiba Tec : Statement of Accounts (2022.12)

Consolidated Financial Results

for the Nine Months Ended December 31, 2022

[Japanese GAAP]

February 6, 2023

Company name: Toshiba Tec Corporation

Stock exchange listing: Tokyo

Code number: 6588

URL: https://www.toshibatec.co.jp/

Representative:

Hironobu Nishikori

President and CEO

Contact:

Akira Abe

General Manager of Corporate Communications Division

Phone: [phone]

Scheduled date of filing quarterly securities report: February 8, 2023

Scheduled date of commencing dividend payments: -

Availability of supplementary briefing material on quarterly financial results: Yes

Schedule of quarterly financial results briefing session: Yes

(Amounts of less than one million yen are rounded down)

1. Consolidated Financial Results for the Nine Months Ended December 31, 2022 (April 1, 2022 to December 31, 2022)

(1) Consolidated Operating Results

(% indicates changes from the previous corresponding period.)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Nine months ended

Million yen

%

Million yen

%

Million yen

%

Million yen

%

December 31, 2022

374,470

14.0

11,804

36.2

9,937

23.0

(2,005)

-

December 31, 2021

328,525

11.8

8,664

171.0

8,076

220.3

6,193

-

(Note) Comprehensive income:

Nine months ended December 31, 2022:

¥

(2,357) million

[

-%]

Nine months ended December 31, 2021:

¥

6,610 million

[

-%]

Basic earnings

Diluted earnings

per share

per share

Nine months ended

Yen

Yen

December 31, 2022

(36.23)

-

December 31, 2021

112.55

112.52

(Note) Diluted earnings per share for the nine months ended December 31, 2022 is not presented even though the Company has issued potential shares, because basic earnings per share was net loss.

(2) Consolidated Financial Position

		Total assets	Net assets	Capital adequacy ratio
As of		Million yen		Million yen	%
December 31, 2022		311,747		112,600	34.6
March 31, 2022		310,256		117,662	36.1
(Reference) Equity:	As of December 31, 2022:	¥	107,862 million
	As of March 31, 2022:	¥	111,946 million

2. Dividends

				Annual dividends
	1st		2nd	3rd		Year-end	Total
	quarter-end	quarter-end	quarter-end
	Yen		Yen	Yen		Yen	Yen
Fiscal year ended March 31, 2022	-		20.00	-		20.00	40.00
Fiscal year ending March 31, 2023	-		20.00	-
Fiscal year ending March 31, 2023 (Forecast)						20.00	40.00
(Note) Revision to the forecast for dividends announced most recently:	No

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2023 (April 1, 2022 to March 31, 2023)

(% indicates changes from the previous corresponding period.)

			Net sales		Operating profit	Ordinary profit	Profit attributable to	Basic earnings
				owners of parent	per share
			Million yen		%	Million yen	%	Million yen		%	Million yen	%	Yen
Full year			510,000		14.5	14,000	21.0	11,500		12.8	(2,500)	-	(45.17)
(Note) Revision to the financial results forecast announced most recently:	Yes
* Notes:
(1) Changes in significant subsidiaries during the nine months ended December 31, 2022
(changes in specified subsidiaries resulting in changes in scope of consolidation):	No
New	-	(Company name:									)
Exclusion:	-	(Company name:									)
(2) Accounting policies adopted specially for the preparation of quarterly consolidated financial statements:	Yes

(Note) For details, please refer to "2. Quarterly Consolidated Financial Statements and Notes (3) Notes to the quarterly consolidated financial statements (Accounting policies adopted specially for the preparation of quarterly consolidated financial statements)" on page 9 of this report.

1. Changes in accounting policies, changes in accounting estimates and retrospective restatement
2. 1. Changes in accounting policies due to the revision of accounting standards: Yes
   2. Changes in accounting policies other than 1) above: No
   3. Changes in accounting estimates: No
   4. Retrospective restatement: No

(Note) For details, please refer to "2. Quarterly Consolidated Financial Statements and Notes (3) Notes to the quarterly consolidated financial statements (Changes in accounting policies, etc.)" on page 9 of this report.

1. Total number of issued shares (common shares)
2. 1. Total number of issued shares at the end of the period (including treasury shares):

December 31, 2022:	57,629,140	shares
March 31, 2022:	57,629,140	shares
2) Total number of treasury shares at the end of the period:
December 31, 2022:	2,281,191	shares
March 31, 2022:	2,301,938	shares

3) Average number of shares during the period:
Nine months ended December 31, 2022:	55,339,982	shares
Nine months ended December 31, 2021:	55,024,780	shares

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
• Proper use of earnings forecasts, and other special matters (Explanation for the proper use of earnings forecasts)
  Financial results forecasts are based on information currently available to the Company and certain assumptions deemed reasonable and are not intended to be the Company's guarantee that they will be achieved. Actual results may significantly vary due to a variety of factors. For the assumptions used as the basis for the earnings forecasts and precautions regarding the use of the earnings forecasts, please refer to "1. Qualitative information on the financial results for the period under review (3) Consolidated financial results forecast and other forward-looking information" on page 4 of this report.

	Table of Contents of Attachments
1. Qualitative information on the financial results for the period under review	2
(1)	Operating results	2
(2)	Financial condition	3
(3)	Consolidated financial results forecast and other forward-looking information	4
2. Quarterly Consolidated Financial Statements and Notes	5
(1)	Quarterly Consolidated Balance Sheet	5
(2)	Quarterly Consolidated Statement of Income and Comprehensive Income	7
	Quarterly Consolidated Statement of Income (For the nine months)	7
	Quarterly Consolidated Statement of Comprehensive Income (For the nine months)	8
(3)	Notes to the quarterly consolidated financial statements	9
	Notes on going concern assumption	9
	Notes in the event of significant amount changes in shareholders' equity	9
	Accounting policies adopted specially for the preparation of quarterly consolidated financial statements	9
	Changes in accounting policies, etc.	9
	Additional information	9
	Notes to Quarterly Consolidated Statement of Income	10
	Segment information, etc.	11

1

1. Qualitative information on the financial results for the period under review

(1) Operating results

The world economy for the nine months ended December 31, 2022 appeared to be in a favorable climate for recovery with progress seen in balancing economic activities with measures taken to prevent COVID-19 infection in various countries. However, the economic outlook still remained uncertain due to the unpredictable effects of accelerated monetary tightening overseas, the Russian-Ukrainian problem, and economic activity restrictions in China, in addition to sharp price rises, soaring raw material prices, and supply restrictions.

Amid such conditions, Toshiba Tec Corporation (the "Company") and its subsidiaries (collectively, the "Group") set forth the Basic Policy of the FY22-24Mid-term Business Plan, "To become a global top solutions partner by generating new value through co-creation with the aim of contributing to the resolution of social issues." Under the basic policy, the Group has focused its energy on carrying out various measures to develop its business. At the same time, as a solutions partner that helps solve issues in the domains of stores, offices, logistics, and manufacturing, the Group has promoted initiatives to achieve the Sustainable Development Goals (SDGs) together with customers and strived to contribute to realizing a sustainable society.

In the nine months ended December 31, 2022, sales of POS systems for the overseas market and multifunction peripherals (MFPs) for the overseas market increased due mainly to the impact of foreign exchange rates and growth in the Americas, resulting in net sales of ¥374,470 million (up 14% year on year). On the profit front, although there were effects of tight supply-demand balance and soaring prices in components and international cargo transportation, profitability of MFPs improved, which resulted in operating profit of ¥11,804 million (up 36% year on year). However, "Foreign exchange losses" as non- operating expenses resulted in ordinary profit of ¥9,937 million (up 23% year on year), and "Loss on litigation" of ¥6,900 million related to a patent dispute as an extraordinary loss and other factors resulted in loss attributable to owners of parent of ¥2,005 million (profit attributable to owners of parent of ¥6,193 million in the same period of the previous fiscal year). For details of the patent dispute, please refer to "2. Quarterly Consolidated Financial Statements and Notes (3) Notes to the quarterly consolidated financial statements (Notes to Quarterly Consolidated Statement of Income) (Loss on litigation)."

Results of reportable segments for the nine months ended December 31, 2022 were as follows.

Retail Solutions Business Group

The Retail Solutions Business Group handles POS systems for domestic and overseas markets, auto ID systems for domestic market, and related products. Amid a severe business environment in which the impact of the spread of COVID-19 and intensifying competition with peers continue, the business group has worked on various initiatives under the basic policy of "Aim at becoming a global top solutions partner in the distribution industry." These initiatives include solution business expansion through the global common retail platform "ELERA" and strategic partnership, concentrated investment in growth fields (data services, next generation stores, payment, and Supply Chain Management (SCM)), and the expansion of service business in overseas markets.

Sales of POS systems for the domestic market declined due to a continued downturn in the investment appetite of retail and restaurant businesses affected by the prolonged COVID-19 pandemic, parts supply constraints, rising prices, and other factors. However, sales showed signs of recovery due to efforts to expand sales mainly of payment terminals, self-ordering systems, and smart receipts by taking into account measures against COVID-19, as well as efforts to revise selling prices.

Sales of POS systems for overseas markets increased due to the impact of foreign exchange rates, an increase in sales in the Americas, and other factors.

Sales of auto ID systems for the domestic market increased, primarily due to an increase in sales of barcode printers, mainly to specific customers.

As a result, net sales of the Retail Solutions Business Group were ¥218,413 million (up 11% year on year). Operating profit of the business group was ¥6,151 million (down 25% year on year) due to a deterioration in profit and loss of POS systems for the domestic market affected by the negative impact of the cost increase due to yen depreciation, and tight supply-demand balance and soaring prices in components.

2

Workplace Solutions Business Group

The Workplace Solutions Business Group handles multifunction peripherals (MFPs) for domestic and overseas markets, auto ID systems for overseas markets, inkjet heads for domestic and overseas markets, and related products. Amid a severe business environment in which the impact of the spread of COVID-19, tight supply-demand balance and soaring prices in components and international cargo transportation, declining printing volume due to post-COVID-19 work style reforms and office DX promotion, and intensifying competition with peers continue, the business group reinforced "Further strengthen our response capability to market changes" to focus on achieving its targets. At the same time, the business group worked on strengthening solutions including Document Management System (DMS), the auto ID business, the cloud solutions platform, and other measures in order to expand business in growth areas. Sales of MFPs increased due to the impact of foreign exchange rates in addition to increased sales in the Americas, Europe, Asia, and other overseas regions as a result of focusing on changing transportation method or route, raising selling prices, and other efforts, despite the ongoing shortages in product supply caused by the tight supply-demand balance in international cargo transportation, while the effects of the shortage of components were mitigated.

Sales of auto ID systems for overseas markets increased as a result of increased sales in the Americas, Europe, Asia, and other overseas regions and the impact of foreign exchange rates.

Sales of inkjet heads decreased due to decreased sales to domestic customers despite increased sales to overseas customers.

As a result, net sales in the Workplace Solutions Business Group were ¥158,778 million (up 18% year on year). Operating profit for the business group improved to ¥5,652 million (up ¥5,233 million year on year) due to the increase in net sales resulting from the increased selling prices and other factors and vigorous efforts to reduce fixed costs, etc., in addition to progress of effect mitigation of the tight supply-demand balance and soaring prices in components and international cargo transportation.

(Note) An auto ID system is a system that uses hardware and software devices to recognize and manage data content by automatically scanning barcode and RFID tag data.

(2) Financial condition

Assets at the end of the third quarter of the fiscal year ending March 31, 2023 increased by ¥1,491 million from the end of the previous fiscal year to ¥311,747 million. This was mainly because merchandise and finished goods and "Other" in current assets and "Other" in investments and other assets increased by ¥9,095 million, ¥5,982 million, ¥3,548 million, respectively, although cash and deposits, group deposits paid, and notes and accounts receivable - trade, and contract assets in current assets declined by ¥6,250 million, ¥6,955 million and ¥3,942 million, respectively.

Liabilities increased by ¥6,553 million from the end of the previous fiscal year to ¥199,147 million. This was mainly because notes and accounts payable - trade, income taxes payable, and "Other" in current liabilities and "Other" in non-current liabilities increased by ¥1,385 million, ¥1,245 million, ¥1,747 million, and ¥2,197 million, respectively.

Net assets decreased by ¥5,062 million from the end of the previous fiscal year to ¥112,600 million. This was primarily due to a decrease in retained earnings owing to the recording of loss attributable to owners of parent of ¥2,005 million and the payment of dividends of ¥2,213 million, a decrease in remeasurements of defined benefit plans of ¥615 million, and a decrease in non-controlling interests of ¥973 million, although foreign currency translation adjustment increased by ¥773 million.

3