SMC CORPORATION May 15, 2023
Consolidated Financial Highlights for the Year ended March 31, 2023
[under Japanese GAAP]
Company name : | SMC Corporation | ||||||||||||||
Stock exchange listing : | Tokyo Stock Exchange, Prime Market | ||||||||||||||
Security code : | 6273 | ||||||||||||||
URL : | https://www.smcworld.com/ir/en/ | ||||||||||||||
Representative : | Yoshiki Takada, | President | |||||||||||||
Contact person : | Masahiro Ota, | Director and Executive Officer | |||||||||||||
Projected date of annual shareholders' meeting : | June 29, 2023 | ||||||||||||||
Projected date of filing Annual report : | June 29, 2023 | ||||||||||||||
Projected starting date of dividend payment : | June 30, 2023 | ||||||||||||||
1. Consolidated Financial Highlights for the Year ended March 31, 2023 | |||||||||||||||
(April 1, 2022 to March 31, 2023) | (Millions of yen, except per share figures) | ||||||||||||||
(1) Consolidated Operating Results | |||||||||||||||
Fiscal Year | Profit | ||||||||||||||
Net sales | Operating profit | Ordinary profit | attributable to | ||||||||||||
ended March 31 | |||||||||||||||
owners of parent | |||||||||||||||
2023 | 824,772 | 13.4% | 258,200 | 13.3% | 305,980 | 12.1% | 224,609 | 16.4% | |||||||
2022 | 727,397 | 31.7% | 227,857 | 48.6% | 272,981 | 58.9% | 192,991 | 58.5% | |||||||
Fiscal Year | Net income | Net income per share | Return on | Return on | Operating | ||||||||||
ended March 31 | per share (Yen) | (diluted basis) (Yen) | equity | assets | income ratio | ||||||||||
2023 | 3,444.55 | − | 13.8% | 16.5% | 31.3% | ||||||||||
2022 | 2,923.76 | − | 13.2% | 16.5% | 31.3% |
(Note) | Comprehensive income | Year ended March 31, 2023 : |
Year ended March 31, 2022 : |
¥ | 256,933 | million | (4.6％) |
¥ | 269,196 | million | 47.9％ |
(2) Consolidated Financial Positions
As of March 31 | Total assets | Net assets | Equity ratio | Net assets | |||
per share (Yen) | |||||||
2023 | 1,927,940 | 1,702,325 | 88.1% | 26,331.72 | |||
2022 | 1,769,951 | 1,559,274 | 87.9% | 23,808.08 | |||
(Reference) | Shareholders' equity | As of March 31, 2023 : | ¥ | 1,698,413 million | |||
As of March 31, 2022 : | ¥ | 1,555,628 million | |||||
(3) Consolidated Cash Flows | |||||||
Fiscal Year | Cash flows from | Cash flows from | Cash flows from | Cash and cash | |||
ended March 31 | operating activities | investing activities | financing activities | equivalents at the | |||
end of period | |||||||
2023 | 101,617 | (87,086) | (113,299) | 491,324 | |||
2022 | 156,093 | (116,215) | (88,933) | 559,296 |
2. Dividends
For the year | Dividend per share (Yen) | Total dividends | Dividend | Dividend | ||||
ended March 31 | 1Q | 2Q | 3Q | 4Q | Total | ratio | on equity | |
2022(Actual) | − | 300.00 | − | 450.00 | 750.00 | 49,227 | 25.7% | 3.4% |
2023(Actual) | − | 450.00 | − | 450.00 | 900.00 | 58,430 | 26.1% | 3.6% |
2024(Projected) | − | 450.00 | − | 450.00 | 900.00 | 31.7% |
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SMC Corporation
3. Forecasts of Consolidated Operating Results for the Year ending March 31, 2024
) | |||||||
(Millions of yen, except per share figures | |||||||
Operating | Ordinary | Profit | Net income | ||||
Net sales | attributable to | ||||||
profit | profit | per share (Yen) | |||||
owners of parent | |||||||
Half year ending | 387,000 | (8.2%) | 109,000 | (18.4%) | 118,000 (34.7%) | 85,000 (36.1%) | 1,317.81 |
September 30, 2023 | |||||||
Year ending | 807,000 | (2.2%) | 233,000 | (9.8%) | 253,000 (17.3%) | 183,000 (18.5%) | 2,837.18 |
March 31, 2024 | |||||||
＊Notes
- Changes in significant subsidiaries during the fiscal year ended March 31, 2023: None
- Changes in accounting policies, changes in accounting estimates and retrospective restatement
- Changes in accounting policies applied due to revisions of accounting standards: Yes
- Changes in accounting policies other than the above: None
- Changes in accounting estimates: None
- Retrospective restatement: None
(3) Number of shares issued | As of March 31,2023 | As of March 31,2022 |
1. Number of common shares issued (including treasury shares) | 67,369,359 | 67,369,359 |
2. Number of treasury shares | 2,868,732 | 2,029,013 |
3. Average number of common shares for the year | 65,207,145 | 66,007,966 |
(Note) The company's shares held by the Board Benefit Trust (BBT) for the Directors' Stock Compensation Plan (2,600 shares as of March 31, 2022, and as of March 31, 2023) is included in the number of treasury shares, which is excluded in the calculation for the above: 2. Number of treasury shares and 3. Average number of common shares for the year.
< Reference >
Non-consolidated Financial Highlights for the Year ended March 31, 2023
(April 1, 2022 to March 31, 2023) | (Millions of yen, except per share figures) | ||||||||
(1) Non-consolidated Operating Results | |||||||||
Fiscal Year | Net sales | Operating profit | Ordinary profit | Profit | Net income | ||||
ended March 31 | per share (Yen) | ||||||||
2023 | 510,431 | 9.3% | 142,759 | 10.9% | 257,002 | 42.3% | 203,180 | 55.5% | 3,115.92 |
2022 | 466,970 | 34.3% | 128,718 | 47.0% | 180,580 | (39.9%) | 130,658 | (50.3%) | 1,979.43 |
(2) Non-consolidated Financial Positions
As of March 31 | Total assets | Net assets | Equity ratio | Net assets per share (Yen) | |||
2023 | 1,253,875 | 1,103,130 | 88.0% | 17,102.62 | |||
2022 | 1,159,760 | 1,017,351 | 87.7% | 15,570.04 | |||
(Reference) | Shareholders' equity | As of March 31, 2023 : | ¥ 1,103,130 | million | |||
As of March 31, 2022 : | ¥ 1,017,351 | million |
These Consolidated Financial Highlights are not subject to audit procedures by the independent accounting auditor.
Explanation of appropriate use of financial forecasts; other special items
Forecasts are based on information and certain premises that we consider to be reasonable at the time we released these Consolidated Financial Highlights. Some factors could cause actual results to differ from expectations.
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SMC Corporation
1. Overview of Operating Results
(1) Overview of the fiscal year 2022
The 2022 fiscal year that ended on March 31, 2023, saw normalization from the Coronavirus (COVID-19) pandemic that manufacturing sector in general has recovered its appetite for capital investments. However, the outlook remains uncertain due to the difficulties seen in procuring parts and materials, the prolonged Russian military invasion of Ukraine, the rising tensions between the U.S. and China, and concerns about recession due to monetary tightening in the U.S. and Europe.
As for the demand for automation control equipment, the semi-conductor and electrical machinery-related demand was high within the first half of the period. However, within the second half, there were moves to postpone capital investments, mainly in the U.S. and Europe due to global inflation and the economic slowdown. Within the automotive-related industry, the demand did not reach a full-scale recovery due to the continued impact of shortages in semi-conductors and other components, however, demand growth was seen mainly in China for the electric vehicle battery-related products. Although there were some new demands for labor-saving alternatives and automation following COVID-19, demands for machine tool-related, the medical-related,food-related, and other industries showed signs of slowing down due to the economic slowdown.
Within this business environment, the SMC Group has continued to invest aggressively in new facilities and creating multi-location production facilities to ensure product supply capabilities based on SMC's Business Continuity Plan (BCP) to meet a growing global demand. SMC has also continued to focus on developing new and efficiently performing products that can address environmental issues and contribute to the reduction of CO2 emissions by its customers while also strengthening its global sales activity collaboration with its IT infrastructure. In addition, SMC has started to take specific initiatives by setting medium- to long-term target to reduce 48% of GHG emissions for Scope 1 and Scope 2 by FY2030 and achieve carbon neutral by FY2050, based on the GHG protocol to realize decarbonized society.
As a result, consolidated net sales for the fiscal year 2022 were 824,772 million yen (13.4% increase year on year) mainly from the increase in sales quantity and increase in revenue from the foreign exchange fluctuations for the sales in overseas. Operating profit was 258,200 million yen (13.3% increase) due to the increase in revenue, in spite of the increases in selling, general and administrative expenses mainly from logistics, personnel, and IT related costs. Ordinary profit was 305,980 million yen (12.1% increase) with the increases in interest income from the rise in market interest rate. With the gain on sale of investment securities, profit before income taxes was 308,777 million yen (13.2% increase), and profit attributable to owners of parent was 224,609 million yen (16.4% increase).
ROE became 13.8%, increased by 0.6 points from the previous fiscal year end.
(2) Overview of financial positions
Total assets as of the end of the fiscal year 2022 were 1,927,940 million yen, a 157,988 million yen increase yoy. Cash and deposits were 603,570 million yen, an 81,263 million yen decrease due to purchases of treasury shares and U.S. treasuries, tax payments, inventory buildup, and capital expenditures, in spite of the earnings from business activities and the gains from the foreign exchange on the foreign exchange currency deposits. Notes and accounts receivable-trade were 228,848 million yen, a 16,909 million yen increase, resulted from the increase in revenue and revenue from the exchange fluctuations on the sales in overseas. Inventories were 418,602 million yen, a 115,056 million yen increase, by increasing purchase to correspond to the high demands and by strategically increasing parts and raw material inventories to overcome recent constraints on supply chain. Property, plant and equipment was 326,995 million yen, a 56,410 million yen increase, by further increasing investments for the production and logistics facilities within and outside of Japan, from the perspectives to secure production capabilities in order to correspond to the rising demands and to enforce BCP to enhance its sustainable capability of supplying its products. SMC also acquired land for the relocation of the SMC's core technical center in Tsukuba as to further enhance its engineering functions and to attract talented engineering staffs.
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SMC Corporation
Total liabilities were 225,615 million yen, a 14,937 million yen increase yoy. Notes and accounts payable-trade were 73,636 million yen, an 11,534 million yen increase from purchases associated with demand increase and strategically increasing parts and raw materials procurements.
Total net assets were 1,702,325 million yen, a 143,051 million yen increase yoy, mainly due to the increases in retained earnings resulted from the increase in profit, and 120,275 million yen, a 32,381 million yen increase in foreign currency translation adjustment from the depreciation of the yen, in spite of a 55,030 million yen decrease from the purchase of treasury shares.
Equity ratio became 88.1%, decreased by 0.2 point from the previous fiscal year end.
(3) Overview of cash flows
The balance of cash and cash equivalents (hereinafter "cash") as of the end of the fiscal year 2022 was 491,324 million yen,a 67,972 million yen decrease yoy.
(Cash flows from operating activities)
Net cash provided by operating activities was 101,617 million yen (decrease of 54,476 million yen revenue decrease yoy), mainly due to the cash flows based on the operating profit / loss calculated from: profit before income taxes 308,777 million yen (35,925 million yen revenue increase), depreciation 25,767 million yen (5,210 million yen increase), foreign exchange gains 21,874 million yen (3,725 million yen increase), in addition to the inventories 106,728 million yen (72,951 million yen increase) and income taxes paid 91,581 million yen (29,612 million yen increase).
(Cash flows from investing activities)
Net cash used by investing activities was 87,086 million yen (a 29,128 million yen decrease yoy), mainly due to the investments of 72,180 million yen (5,408 million yen decrease) to further enhance its production capabilities, and purchase and sale of investment securities of 42,063 million yen (54,868 million yen increase) for fund management purposes.
(Cash flows from financing activities)
Net cash used in financing activities was 113,299 million yen (a 24,366 million yen increase yoy), due to the purchase of treasury shares 55,030 million yen (5,010 million yen increase) and dividends paid 58,776 million yen (19,144 million yen increase).
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SMC Corporation
(4) Outlook for the next fiscal year
We estimate that the outlook for the next fiscal year 2023 will remain uncertain, due to the decoupling of the U.S. and China, growing tension in Ukraine, and concerns about the economic recession due to the interest rate policies of various countries.
At this time, although various countries are temporarily at adjustment phases especially for memories, semiconductor and electronic-related industries are expected to see continuous growth in medium-term. Automotive- related industry expects a recovery in the production from the shortage of semi-conductors, and demand growth in battery-related due to the EV shift. In spite of the stagnation of the capital investments, increase in demand for post- COVID-19 automation is expected in machine tool-related, the medical-related, and food-related industries.
Within this business environment, the SMC Group will continue to make various efforts to win further market share in various regions to achieve its sales target of "JPY 1 Billion by FY2026", by aggressively investing in new facilities; establishing SMC's BCP structure to improve its capabilities including procurement; strengthen sales expansion activities on its energy-saving products such as temperature control equipment, electric actuators, AMS (Air Management System) and booster regulator.
The consolidated financial results for the next fiscal year are forecasted to be as follows, assuming average exchange rates of the U.S. dollar, the euro, the Chinese yuan against Japanese yen are 130 yen, 145 yen, and 19 yen respectively. Net sales 807,000 million yen, operating profit 233,000 million yen, ordinary profit 253,000 million yen and profit attributable to owners of parent 183,000 million yen.
Since June of 2022, SMC has frozen all exports to and new investments at its Russian subsidiaries. If SMC were to complete a full withdrawal from the Russian market in the future, there is a risk that SMC will not be able to obtain the required permits and approvals from the local authorities to recover SMC's remaining assets within the country. As such, the SMC Group may see damages of up to 12 billion yen from the loss of these assets.
2. Basic concept on selection of accounting standards
In order to maintain the adequacy in figure comparison at all times, SMC Group will continue to disclose consolidated financial statements in accordance with the accounting principles (GAAP) generally adopted in Japan.
We will appropriately consider adopting IFRS through addressing internal and external factors which affect both within and outside of Japan when necessary.
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SMC Corporation
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SMC Corporation published this content on 15 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 May 2023 06:16:53 UTC.
