Tsubakimoto Chain : FY2021 Settlement of Accounts Presentation Meeting (Including Q&A session)

TSUBAKIMOTO CHAIN CO.

FY2021 Settlement of Accounts Presentation Meeting

May 27, 2022

Kose: Hello, everyone. I am Kenji Kose, President. Thank you for taking time out of your busy schedules to attend today's financial results briefing.

What's shown here is today's agenda.

I will now explain the financial results for the full fiscal year ended March 31, 2022. The end time may vary slightly, but we appreciate your patience until the end.

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First, here are some highlights of the consolidated financial results.

In the current fiscal year, sales and profits increased compared to the previous fiscal year, which was significantly affected by COVID‐19. Despite the prolonged effects of the shortage of semiconductors in the Mobility business and parts procurement problems in the MC business, the strong performance of the Chain business, various production reforms, and cost reductions resulted in higher sales and profit compared to the forecast.

The result is JPY215,879 million in net sales, an increase of 11.6% over the previous year, or JPY22,480 million. This represents an increase of 2.3%, or JPY4,879 million, over the figure announced last October 29. The impact of the exchange rate was approximately JPY8.5 billion due to the weakening of the yen.

Operating income was JPY17,842 million, an increase of 100.5% over the previous year, which is more than double the previous year's figure. This represents an increase of JPY8,945 million. Compared to the forecast announced last year, the increase is 19%, or JPY2,842 million. The foreign exchange impact here is approximately JPY500 million on the positive side.

The operating income margin was 8.3%, up 3.7 points from the previous year.

As a result, return on equity, or ROE, ended up at 7.4%, an improvement of 2.6 percentage points from the previous year.

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Next, I would like to present the results by business segment.

The details will be explained later, so here is an overview. Compared to the previous year, the Materials Handling business also turned from a loss to a profit. So, all four major businesses have achieved increases in both sales and profit.

Compared to the forecast announced on October 29, 2021, the Motion Control business saw a slight decrease in sales, but the Company posted an increase in profit. For Chain, Mobility, and Materials Handling, all businesses posted increased revenue and profit.

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Next, here is an analysis of the factors that contributed to the increase and decrease in consolidated operating income.

First, on the profit increase factor side, in short, the positive factor, as I mentioned earlier, are about JPY500 million due to the effect of foreign exchange rates, JPY9.6 billion due to higher sales, and JPY5 billion due to higher inventories are the result of large orders, higher production sales, and the accumulation of work‐in‐ process parts and products to meet those orders. The P&L of CCC (Central Conveyor Company in the USA) has improved resulting in a positive impact of JPY2.7 billion.

On the contrary, the factors for the decrease in operating income are the increases in packing and transportation costs of about JPY900 million, other fixed costs of JPY1.8 billion, and material costs of JPY1.8 billion, which we see as major issues to be addressed in the future. The increase in personnel expenses was JPY4.2 billion, which was due to an increase in personnel for production, overtime allowances, and recruiting expenses for the shortage of human resources.

As a result, operating income for the fiscal year ended March 31, 2022 was JPY17.8 billion, up from JPY8.8 billion in the fiscal year ended March 31, 2021.

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