Amada : Consolidated Results for the Three Months Ended June 30, 2023(with script)

AMADA CO.,LTD.

Financial Results Briefing for 1st Quarter FY2023 (Presentation)

August 8, 2023

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In Q1 of the previous fiscal year, revenue increased significantly due to a backlog of orders, and profits also increased significantly due to improved selling prices, despite material price hikes, procurement delays, and increased distribution costs.

In the current fiscal year, although prices of materials, particularly electronic components, continues to rise, the effect on production activities is being mitigated due to an improved procurement environment.

Under these circumstances, sales revenue increased 16.9% YoY to JPY86.5 billion, exceeding internal expectations. This is mainly attributed to steadily linking the JPY172.1 billion order backlog accumulated at the end of the previous fiscal year into sales revenue.

Operating profit increased due to improved selling prices, revenue growth effects, and the curbing of fixed costs increases, as overseas shipping costs began to decrease despite material price hikes continuing. It recorded a significant 54.7% YoY increase in profit to JPY12 billion, partly due to the effects of foreign exchange rates. Current profit increased 60.3% YoY to JPY9.3 billion.

As a result, sales revenue, operating profit, and current profit have all reached record highs for Q1.

Also, although not shown here, the progress rate compared to the disclosed forecast was 23% for sales revenue and 24% for operating profit, which is significantly higher than the previous year and the historical average, showing a good start to the year.

Orders received were JPY86.8 billion, down 16.4% YoY, due to particularly high levels of difficulties in Q1 of both the previous fiscal year and the fiscal year before it, as well as this year's order receipt activities taking place amid rising inflation and fears of an economic slowdown due to continuing interest rate hikes.

However, this JPY86.8 billion in orders received reached the second highest level for Q1, following the previous fiscal year. The order backlog increased by about JPY7 billion from the end of the previous fiscal year to JPY179.2 billion.

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Page two is a summary of the financial results.

As mentioned at the beginning of this presentation, sales revenue totaled JPY86.5 billion, up 16.9% YoY.

Gross profit was JPY38.9 billion, up 20.8% YoY, and the gross profit margin increased 1.5 percentage points from 43.5% to 45%.

In terms of the positive aspects, the growth factors for the increase in the gross profit margin that excludes the effects of foreign exchange rates were a 0.6-point improvement in selling prices for current products ordered in the previous fiscal year, as well as a 0.3-point effect of capacity utilization associated with increased production, which offset the negative aspects of a 0.7- point increase in material costs, including electronic components and other factors, resulting in a progressing improvement.

Although SG&A expenses totaled JPY27.1 billion at an increase of JPY2.1 billion YoY, the SG&A ratio was 31.4%, a decrease of 2.3 percentage points YoY from 33.7%.

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Page three shows the order trends.

Orders received, as mentioned earlier, totaled JPY86.8 billion, down 16.4% YoY from JPY103.7 billion.

Of this amount, the sheet-metal sector shown in the bar graph in the center of the page totaled JPY63.7 billion, down 16.6% YoY from JPY76.4 billion.

Although the right side shows orders received by region, domestic orders received were JPY32.3 billion, with a 31.6% decrease due in part to high levels of difficulty in the previous year, while orders received overseas were JPY54.4 billion, a decrease of only 3.6%, partly due to the effects of exchange rates.

We will explain the order environment again later in the order performance trends with the same exchange rate.

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Page four shows the performance by business segment.

The metal processing machinery business, shown in the bar graph on the left, reported sales revenue of JPY71 billion, an 18.9% increase YoY, along with an operating income of JPY9.7 billion, a significant 63.9% increase YoY.

On the right side, the metalwork machinery business reported sales revenue of JPY15.1 billion, an 8.5% increase YoY, along with an operating income of JPY2 billion, an 28.3% increase YoY.

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