B U S I N E S S H I G H L I G H T S

For t he f irs t ha lf of f is c a l ye a r e nding Ma rc h 3 1 , 2 0 2 4

November 6, 2023

N i t e rra C o . , L t d .

Niterra Co., Ltd. All Rights Reserved

Key Business Highlights

▍Financial Results for FY2023 - H1

  • Both revenue and operating profit have reached record high.
  • OEM sales was lower than our initial expectation, due to the weak Chinese market. For YoY amount, it remained steady due to the ease of supply shortage of semiconductors for automotive and rebound demand from the COVID-19.
  • We conduct the price rise due to the inflation and kept SG&A costs down. In addition, due to exchange rate shifted to weak yen than our expectation, we maintained 19% of the operating profit margin which is the actual level of FY2022 H1.

▍Revised Financial Plan for FY2023

  • Both revenue and operating profit have been revised upward and are planned to reach new record highs.
  • Operating profit margin is expected to be in the 18% range for the full year.
  • Automotive components sales is expected to increase toward the H2 with the easing of the supply shortage of automotive semiconductors, despite the impact of the global economic stagnation, especially in China. In addition, we continue the price rise due to the inflation.
  • In growth business, slowdown will continue due to sluggish market conditions in the SPE business. However, we expect a gradual recovery in the H2, and full-fledged recovery will begin in the next fiscal year.
  • Since the exchange rate shifted to weak yen more than our expectation, the H2 exchange rate has changed as

follows, 1 U.S. dollar = 140 Yen 1 Euro = 150 Yen.

  • The annual dividend is planned to be 160 yen per share, under the policy of 40% payout ratio.

Niterra Co., Ltd. All Rights Reserved

1

Contents

  1. Financial Results for FY2023 - H1
  2. Revised Financial Plan for FY2023
  3. Shareholder Return

Niterra Co., Ltd. All Rights Reserved

2

1 Financial Results of FY2023 - H1

Summary of Financial Results FY2023 - H1 (IFRS)

We achieved record high revenue due to appropriate price rise and the impact of the exchange rate shifted to weak yen , which covered wage increases and inflation.

(Unit: Billion yen)

Revenue

Operating profit

(ratio)

Profit before income taxes (ratio)

Profit attributable to owners of the parent (ratio)

US dollar

FOREX

Euro

FY2022 - H1

279.1

53.6

（19.2%）

61.7

（22.1%）

43.1

（15.4%）

134yen

139yen

FY2023 - H1

Difference

Amounts

Ratio

+22.1

108%

+3.4

106%

+3.9

106%

+3.1

107%

7yen

weak yen

14yen

weak yen

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1 Financial Results of FY2023 - H1

Financial Results of FY2023 - H1 - Revenue (IFRS)

Overview

Even in the midst of a global economic downturn, sales have increased by 8% YoY due to raising price, higher sales in response to the easing of supply shortage of automotive semiconductors and shifting to weak yen of exchange rates.

（Unit: Billion yen）

New businesses

Ceramics

Sensors

Spark& glow plugs

279.1 301.2

2.2

2.4

47.5

54.7

84.1

81.0

139.3 162.9

• Sales increased by 17% YoY.

Spark &

• Sales of OEM remained flat YoY due to the growth

of China and EVs and the slowdown in economic

glow plugs

recovery.

139.3 Billion yen

• Sales of AM declined YoY, as sales in China

➡ 162.9 Billion yen

increased due to from the COVID-19 pandemic,

while sales in the rest settled down.

• Raising price contributed to revenue growth.

Sensors

• Sales increased by 4% YoY.

• Same as above, sales affected by slowing

81.0 Billion yen

economic recovery in China. However, they

➡ 84.1 Billion yen

increased YoY due to easing of supply shortage of

automotive semiconductors.

• Sales decreased by 13% YoY.

• Decrease mainly due to unsteady demand for SPE

Ceramics

resulting from market downturn.

54.7 Billion yen

• In the oxygen concentrators business, the

➡ 47.5 Billion yen

temporary high demand for COVID-19 had passed.

In addition, it was affected that Chinese

Manufacturer Received FDA Certification and

Entered into the U.S. Market.

FY2022 1H

FY2023 1H

New businesses

2.2 Billion yen

• The results were flat compare to the previous year.

➡ 2.4 Billion yen

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1 Financial Results of FY2023 - H1

Financial Results of FY2023 - H1 - Operating Profit (IFRS)

Overview

In the automotive components business, despite the impact of the global economic stagnation, sales increased by 6.4% YoY due to the easing of supply shortage of automotive semiconductors

（Unit: Billion yen）

Temporary factor

Ceramics

53.6 57.0

1.9

1.7

7.0

Automotive components

50.7 Billion yen ➡ 61.2 Billion yen

  • Increase YoY due to steady sales of OEM, steady progress of precious metallization of and raising price and shifting to weak yen of exchange rates.
  • The H1 operating profit is 61.2 billion yen and reached a record high.

Automotive components

61.2

50.7

Ceramics

7.0 Billion yen ➡ 1.7 Billion yen

  • Profit decreased YoY, mainly due to unsteady demand for SPE caused by market downturn.
  • In the oxygen concentrators business, the temporary high demand for COVID-19 had passed and profits declined YoY.

New businesses

▲ 6.3

Billion yen

• The results were on par with the previous year

due to R&D expenses incurred for the future

➡ ▲ 6.1

Billion yen

New

▲ 6.3

businesses

▲ 6.1

※ Approximately 1.9 billion yen of Gain on the partial sale of former head

office land included in Operating Profit.

FY2022 1H

FY2023 1H

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1 Financial Results of FY2023 - H1

Sales Volume Results of Automotive Components (YoY)

ICE automotive production up 8% YoY. OEM spark plugs increased in sales value more than market growth despite regional differences by maximizing sales and profits through price raising.

Sales Volume and Amounts By Region: FY2022 H1 vs FY2023 H1

ICE

Sales Amounts (Exclude FOREX)

Sales Volume

Region

Automotive

Spark plugs

Production

Spark plugs

Sensors

Sensors

Volume

OEM

AM

(Niterra Estimation)

North

+ 8.5 %

9.6 %

+ 2.9 %

+ 7.0 %

▲ 9.6 %

+ 2.1 %

America

Europe

+ 13.8 %

17.4 %

▲ 5.3 %

▲ 11.1 %※1

＋ 12.2 %

▲ 2.2 %

China

+ 7.5 %

13.1 %

+ 6.9 %

▲ 3.2 %※3

＋ 16.2 %

+ 7.6 %

(▲ 7.6%※2)

South East

▲ 3.4 %

▲ 4.1 %

+ 3.2 %

- ※4

▲ 13.2 %

+ 7.3 %

Asia

Global Total

+ 8.0 %

+ 9.6%

+ 2.6 %

0.4 %

▲ 2.8 %

+ 3.1 %

※1

Temporary decrease in sales due to decrease in volume for general-purpose engines, weak exports to China in the European region and automobile

maker's model changes.

※2

ICE vehicle production by Japanese, European and American automobile makers, which are Niterra's customer in China.

※3

Decrease in sales due to growth of local Chinese automakers of finished vehicles.

※4 The situation is complex, and considering the relatively low sales proportion of OEM in ASEAN, we excluded OEM from this scenario.

6

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1 Financial Results of FY2023 - H1

Operating Profit Variance - YoY

  • While labor costs increased due to salary increases and SG&A expenses increased, we executed price raising steadily in line with the plan at the beginning of the period.
  • Despite sales decline caused by temporary market downturn, semiconductor related business such as SPE and PKG increase due to exchange rate shifted to weak yen.

▲1.9

（Unit: Billion yen）

＋5.3

+1.0 ▲0.1 ▲0.3

3.0▲3.5

▲3.5

8.1

▲7.2 7.8

53.6

51.7

57.0

OP

▲10.3

OP

OP

margin

margin

margin

18.9％

19.2％

18.5％

FY2022 H1 Temporary

FY2022 H1

Price

Packing&

Impact of

Depreciation

Energy

Labor

SG&A

Sales increase FOREX

FY2023 H1

※1

expenses

factors

rise

transportation

precious

prices

※2

& product

※1: Without Temporary factors

costs

metals

composition

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7

※2: Excluding packing &transportation costs

1 Financial Results of FY2023 - H1

Financial Results of FY2023-H1 - FOREX Impact

▍FOREX Impact （Impact for operating profit）

FOREX (JPY)

FOREX Impact

Currency

FY 2022 H1 rate

FY 2023 H1 rate

(Billion yen)

USD

US Dollar

134.0

141.0

+ 1.7 ※

EUR

Euro

138.7

153.4

+ 3.1

19.9

19.7

▲ 0.1

CNY

Chinese Yuan

26.4

28.7

+ 0.5

BRL

Brazilian Real

THB

Thai Baht

3.8

4.1

+ 1.4

6.7

8.1

+ 0.7

MXN

Mexican Peso

Others

+ 0.6

Total

+ 7.8

※Including the negative impact of 6 billion yen owing on raw materials which have been purchased in US dollars.

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8

Contents

  1. Financial Results for FY2023 - H1
  2. Revised Financial Plan for FY2023
  3. Shareholder Return

Niterra Co., Ltd. All Rights Reserved

9

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NGK Spark Plug Co. Ltd. published this content on 06 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 November 2023 01:05:06 UTC.