Union Tool : Announcement of FY 12/2023 Q1 Summary Report （1,069KB）

Consolidated Financial Results for the first quarter

of Fiscal Year ending December 31, 2023

May 12, 2023

Listed Company Name ………..	UNION TOOL CO.
Shares Listed …………………..	Tokyo Stock Exchange Code No. 6278
Head Office ……………………	6-17-1,Minami-Ohi,Shinagawa-ku, Tokyo 140-0013
URL …………………………...	https:// www.uniontool.co.jp
CEO …………………………...	Takao Katayama
Contact ………………………...	Norimasa Kurata, Executive Officer Tel [phone]

Date of the Q1 financial reports to be presented to Ministry of Finance Japan: May 12, 2023

1. Financial results for the first quarter of FY2023 (January 1, 2023- March 31, 2023)

( 1 ) Consolidated performance	Amounts less than one million yen have been omitted.
	Net sales YonY	Operating profit YonY	Ordinary profit YonY

	1st quarter of FY 2023	¥m	5,792	-22.5	%		¥m	953	-39.1	%	¥m	1,009	-38.2	%
	1st quarter of FY 2022		7,475	17.7	%			1,566	43.6	%		1,632	37.8	%
			Profit attributable to			Earnings per share			Earnings per share
			owners of parent	YonY					after dilution
	1st quarter of FY 2023	¥m	763	-37.6	%		¥	44.21					-
	1st quarter of FY 2022		1,223	39.3	%			70.81					-
( 2 ) Consolidated financial position						Amounts less than one million yen have been omitted.
				Total assets				Net assets			Net assets to total assets
	1st quarter of FY 2023	¥m	68,352			¥m	64,291			94.1	%
	FY 12/2022		69,135				63,625			92.0
	2. Cash dividends
										Per share
				Interim cash dividends			Year-end cash dividends			Annual cash dividends
	FY 12/2022 actual		¥ 42.00					¥ 42.00			¥ 84.00
	FY 12/2023	actual		-						-				-
	forecast		¥ 42.00					¥ 42.00			¥ 84.00

Note: Revision of forecast for dividends since the previous announcement … No

3. Forecasts for the year ending December 31, 2023 (January 1, 2023- December 31, 2023)

	Net sales	Operating profit	Ordinary profit	Profit attributable to	EPS
	owners of parent
Half year	¥m 11,300	¥m 1,600	¥m 1,700	¥m 1,300	¥ 75.25
YonY change	-26.3%	-54.6%	-53.5%	-50.1%	-
Full year	¥m 24,300	¥m 3,500	¥m 3,600	¥m 2,600	¥ 150.50
YonY change	-16.5%	-43.5%	-46.6%	-48.0%	-

Note: Revision of forecasted consolidated financial results since the previous announcement … Yes

For details, please refer to "Notice of Revision to Consolidated Financial Forecast" disclosed today.

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4. Others

( 1 ) Significant change in subsidiaries during this quarter (change in designated subsidiaries resulting in adjustment to the scope of consolidation) …… None

( 2 ) Application of simplified accounting methods and special accounting methods in the preparation of quarterly consolidated financial statements …… None

( 3 ) Changes in the principles, procedures and presentation method for accounting treatment in the preparation of quarterly consolidated financial statements

1. Changes associated with revisions in accounting standards ……Yes
2. Changes other than above …… None
3. Changes in accounting estimates …… None
4. Retrospective restatement …… None

( 4 ) Shares outstanding
1.	Number of shares outstanding ( including treasury stocks ):
	3/31/2023 … 19,780,000	12/31/2022 … 19,780,000
2.	Number of treasury stocks:
	3/31/2023 …2,504,659	12/31/2022 … 2,504,617
3.	Number of average shares outstanding (cumulative, consolidated at the end of the first quarter):
	3/31/2023 …17,275,362	3/31/2022 … 17,275,523

Request for appropriate use of the business outlook and other special remarks

The forecasts are based on information available to the management at the time of this announcement. Due to variable factors, actual results may be different from the forecast figures.

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Qualitative Information concerning the Quarterly Results

(1) Qualitative information regarding consolidated business results

During the first quarter of this fiscal year, although economic activity slowly normalized, we realized that prices increased due to global monetary tightening and consumer confidence slumped amid an economic downturn. Due to the impact of financial capital market fluctuations etc., the situation in domestic and foreign economies is still uncertain. In our electronic industry, demand was significantly dropped, especially for semiconductor-related products. Affected by that, our net sales for the first quarter of FY12/2023 significantly decreased to ¥5,792 million (YoY -22.5%). Operating profit, ordinary profit, and profit attributable to owners of parent ware ¥953 million (YoY-39.1%), ¥1,009 million (YoY -38.2%), ¥763 million (YoY -37.6%), respectively, because of production adjustment and lower operating rate due to decreased demand.

In Japan, net sales (including intersegment transaction amount) were ¥4,074 million (YoY -20.3%). Operating profit was ¥331 million (YoY -71.0％).

In Asia, excluding Japan, the operating rate at our local factories decreased due to the slowdown of China's economy. Net sales in this segment were ¥2,549 million (YoY -30.9%), and the operating loss ware ¥5 million (operating profit in the first quarter of FY2022 was ¥388 million).

In North America, net sales in this segment were ¥425 million (YoY +10.6%), and operating profit amounted to ¥52 million (YoY +82.9%). In Europe, net sales and operating profit were ¥524 million (YoY -13.0%) and ¥31 million (YoY -17.5%), respectively.

1. Qualitative information regarding forecasts for the year ending December 31, 2023

We revised the FY12/2023 forecast, announced on February 14, 2023.

The electronic industry experienced rapid inventory adjustments and controlling capital investment. We were affected by a drop in demand, especially for semiconductor-related products. Our inventory adjustments and declining operating rates continue due to the influence of China's economic slowdown, declining demand for PCs and smartphones in reaction to COVID-19 special demand, and a decrease in data center-related demand due to reduced capital investment. We review that the speed of demand recovery after the third quarter of FY12/2023 will be slower than expected. Therefore, we revised the full-year sales forecast downward and reduced profit items accordingly. For details, please refer to "Notice of Revision to Consolidated Financial Forecast" disclosed today.

We will prepare for the recovery in demand and focus on further improving the know-how cultivated in the industrial cutting tool field and introducing next-generation products.

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Financial Statements

Consolidated balance sheet

			millions of yen
	FY12/2022		FY12/2023 Q1
	as of December 31, 2022		as of March 31, 2023
Assets
Current assets
Cash and deposits	20,971	20,580
Notes and accounts receivable - trade	8,626	7,511
Securities	－	320
Merchandise and finished goods	5,908	6,481
Work in process	1,351	1,234
Raw materials and supplies	3,501	3,621
Other	379	267
Allowance for doubtful accounts	-23	-17
Total current assets		40,715	40,000
Non-current assets
Property, plant and equipment
Buildings and structures, net	6,334	6,288
Machinery, equipment and vehicles, net	8,774	8,620
Tools, furniture and fixtures, net	310	314
Land	5,942	5,950
Construction in progress	919	1,213
Other, net	200	173
Total property, plant and equipment		22,482	22,561
Intangible assets		60	76
Investments and other assets
Investment securities	5,235	5,287
Other	679	463
Allowance for doubtful accounts	-37	-36
Total investments and other assets		5,877	5,714
Total non-current assets		28,420	28,352
Total assets		69,135	68,352
Liabilities
Current liabilities
Notes and accounts payable - trade	934	746
Accounts payable - other	339	128
Accrued expenses	957	807
Income taxes payable	1,473	323
Contract liabilities	37	47
Provision for bonuses	784	1,156
Provision for bonuses for directors (and other officers)	－	15
Other	396	279
Total current liabilities		4,923	3,504
Non-current liabilities
Long-term accounts payable - other	219	219
Retirement benefit liability	268	261
Other	98	74
Total non-current liabilities		586	556
Total liabilities		5,509	4,061
Net assets
Shareholders' equity
Share capital	2,998	2,998
Capital surplus	3,020	3,020
Retained earnings	60,145	60,184
Treasury shares	-6,735	-6,735
Total shareholders' equity		59,429	59,467
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	744	1,037
Foreign currency translation adjustment	3,302	3,649
Remeasurements of defined benefit plans	149	136
Total accumulated other comprehensive income		4,196	4,823
Total net assets		63,625	64,291
Total liabilities and net assets		69,135	68,352

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Financial Statements

Consolidated statement of income

		millions of yen
	FY12/2022 Q1	FY12/2023 Q1
	January 1, 2022 - March 31, 2022	January 1, 2023 - March 31, 2023
Net sales	7,475	5,792
Cost of sales	4,647	3,571
Gross profit	2,827	2,220
Selling, general and administrative expenses	1,261	1,267
Operating profit	1,566	953
Non-operating income
Interest income	7	13
Dividend income	0	0
Foreign exchange gains	51	－
Rental income from non-current assets	11	11
Subsidy income	19	49
Subsidy income	22	26
Other	11	14
Total non-operating income	124	116
Non-operating expenses
Interest expenses	3	2
Depreciation	10	10
Foreign exchange losses	－	9
Commission expenses	29	26
Taxes and dues	3	3
Other	11	9
Total non-operating expenses	58	61
Ordinary profit	1,632	1,009
Extraordinary income
Gain on sale of investment securities	－	38
Total extraordinary income	－	38
Profit before income taxes	1,632	1,047
Income taxes - current	546	210
Income taxes - deferred	-137	73
Total income taxes	408	283
Profit	1,223	763
Profit attributable to non-controlling interests	－	－
Profit attributable to owners of parent	1,223	763

Consolidated statement of comprehensive income

		millions of yen
	FY12/2022 Q1	FY12/2023 Q1
	January 1, 2022 - March 31, 2022	January 1, 2023 - March 31, 2023
Profit	1,223	763
Other comprehensive income
Valuation difference on available-for-sale securities	5	292
Foreign currency translation adjustment	1,003	347
Remeasurements of defined benefit plans, net of tax	-1	-12
Total other comprehensive income	1,006	627
Comprehensive income	2,230	1,391
Comprehensive income attributable to
Comprehensive income attributable to owners of parent	2,230	1,391
Comprehensive income attributable to non-controlling interests	－	－

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