Toshiba Tec : Statement of Accounts (2022.6)

Consolidated Financial Results

for the Three Months Ended June 30, 2022

[Japanese GAAP]

August 10, 2022

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

Senior Manager of Corporate Communications Division

Phone: [phone]

Scheduled date of filing quarterly securities report: August 10, 2022

Scheduled date of commencing dividend payments: -

Availability of supplementary briefing material on quarterly financial results: No

Schedule of quarterly financial results briefing session: No

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

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

(1) Consolidated Operating Results

(% indicates changes from the previous corresponding period.)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Three months ended

Million yen

%

Million yen

%

Million yen

%

Million yen

%

June 30, 2022

109,299

2.1

203

(93.8)

(2,253)

-

(2,161)

-

June 30, 2021

107,097

26.9

3,299

-

2,739

-

2,691

-

(Note) Comprehensive income:	Three months ended June 30, 2022:
	Three months ended June 30, 2021:

¥	1,476 million	[	(31.9)%]
¥	2,169 million	[	-%]

	Basic earnings	Diluted earnings
	per share	per share
Three months ended	Yen	Yen
June 30, 2022	(39.07)	-
June 30, 2021	48.92	48.91

(Note) Diluted earnings per share for the three months ended June 30, 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	%
June 30, 2022		319,915		117,456	35.1
March 31, 2022		310,256		117,662	36.1
(Reference) Equity:	As of June 30, 2022:	¥	112,240 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	-
Fiscal year ending March 31, 2023			20.00	-		30.00	50.00
(Forecast)
(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			450,000		1.1	18,000	55.6	15,500	52.0	8,000	48.7	145.21
(Note) Revision to the financial results forecast announced most recently:	No
* Notes:
(1) Changes in significant subsidiaries during the three months ended June 30, 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 8 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)" on page 8 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):

June 30, 2022:	57,629,140	shares
March 31, 2022:	57,629,140	shares
2) Total number of treasury shares at the end of the period:
June 30, 2022:	2,300,783	shares
March 31, 2022:	2,301,938	shares

3) Average number of shares during the period:
Three months ended June 30, 2022:	55,328,546	shares
Three months ended June 30, 2021:	55,012,633	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 3 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	3
2. Quarterly Consolidated Financial Statements and Notes	4
(1)	Quarterly Consolidated Balance Sheet	4
(2)	Quarterly Consolidated Statement of Income and Comprehensive Income	6
	Quarterly Consolidated Statement of Income (For the three months)	6
	Quarterly Consolidated Statement of Comprehensive Income (For the three months)	7
(3)	Notes to the quarterly consolidated financial statements	8
	Notes on going concern assumption	8
	Notes in the event of significant amount changes in shareholders' equity	8
	Accounting policies adopted specially for the preparation of quarterly consolidated financial statements	8
	Changes in accounting policies	8
	Additional information	8
	Notes to Quarterly Consolidated Balance Sheet	9
	Segment information	10

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

(1) Operating results

The world economy for the three months ended June 30, 2022 was generally on a recovery track due to progress in balancing economic activities with measures taken to prevent COVID-19 infection in various countries. However, the economy did not reach a full-fledged recovery due to the unpredictable future outlook of 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 three months ended June 30, 2022, although sales of POS systems for the domestic market decreased due to the prolonged impact of COVID-19 and other factors, sales of multifunction peripherals (MFPs) for the overseas market increased due to the impact of foreign exchange rates and other factors, resulting in net sales of ¥109,299 million (up 2% year on year). Meanwhile, on the profit front, profitability in the Retail Solutions Business Group deteriorated due to lower sales of POS systems for the domestic market, tight supply-demand balance and soaring prices in components and international cargo transportation, the increase in "Selling, general and administrative expenses" due to the impact of exchange rate fluctuations and the positive implementation of digital transformation, etc. resulted in operating profit of ¥203 million (down 94% year on year), "Loss on valuation of derivatives" associated with exchange rate fluctuations and "Foreign withholding tax" associated with dividend payments at overseas subsidiary as non-operating expenses resulted in ordinary loss of ¥2,253 million (ordinary profit of ¥2,739 million in the same period of the previous fiscal year), and loss attributable to owners of parent of ¥2,161 million (profit attributable to owners of parent of ¥2,691 million in the same period of the previous fiscal year).

Results of reportable segments for the three months ended June 30, 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 focused on expanding sales mainly of payment terminals, self-ordering systems, smart receipts by taking into account measures against COVID-19. However, sales declined due to a continued downturn in the investment appetite of retail and restaurant businesses affected by the prolonged COVID-19 pandemic, rising prices, and other factors.

Sales of POS systems for overseas markets increased as a result of the steady sales in the Americas, Europe regions due to the impact of foreign exchange rates and other factors.

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

As a result, net sales of the Retail Solutions Business Group were ¥63,435 million (down 2% year on year). Operating profit of the business group was ¥72 million (down 98% year on year) due to lower sales in addition to 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 the steady sales in the Americas, Europe, Asia, and other overseas regions as a result of changing transportation method or route and focusing on product supply response such as aggressive design changing and adoption of alternative components, despite the tight supply-demand balance in components and international cargo transportation.

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

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

As a result, net sales in the Workplace Solutions Business Group were ¥46,774 million (up 8% year on year). Operating profit for the business group improved to ¥131 million (operating loss of ¥143 million in the same period of the previous fiscal year) due mainly to the increase in net sales despite being affected by tight supply-demand balance and soaring prices in components and international cargo transportation, and the negative impact of foreign exchange rates.

(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 first quarter of the fiscal year ending March 31, 2023 increased by ¥9,659 million from the end of the previous fiscal year to ¥319,915 million. This was mainly because merchandise and finished goods, work in process, and raw materials and supplies in current assets and "Other" in investments and other assets increased by ¥5,962 million, ¥2,150 million, ¥2,797 million, and ¥3,307 million, respectively, although notes and accounts receivable - trade, and contract assets in current assets declined by ¥5,180 million.

Liabilities increased by ¥9,864 million from the end of the previous fiscal year to ¥202,458 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 ¥2,265 million, ¥1,533 million, ¥4,254 million, and ¥1,593 million, respectively.

Net assets decreased by ¥206 million from the end of the previous fiscal year to ¥117,456 million. This was primarily due to a decrease in retained earnings of ¥2,161 million owing to the recording of loss attributable to owners of parent, a decrease of ¥1,106 million due to payment of dividends, a decrease in valuation difference on available-for-sale securities of ¥552 million and a decrease in non-controlling interests of ¥495 million, although foreign currency translation adjustment increased by ¥4,436 million.

(3) Consolidated financial results forecast and other forward-looking information

The Company has no revision to its consolidated financial results forecast for the fiscal year ending March 31, 2023 which was announced on May 11, 2022, at the time of the announcement of the financial results for the fiscal year ended March 31, 2022.

(The reference exchange rates used in the consolidated financial results forecast for the fiscal year ending March 31, 2023 are ¥120 to the US dollar and ¥135 to the euro.)

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