ANEST IWATA : Supplementary Presentation Material of FY2021 Third Quarter Financial Results

Supplementary Presentation

Material of FY2021 Third

Quarter Financial Results

ANEST IWATA Corporation

February 10, 2022

First Section of the Tokyo Stock

Exchange - Machinery

Securities Code 6381

FY2021 3Q financial highlights

Overseas markets contributed to increases in the sales of both general -purpose and customized products. Coupled with the cost control through the work reform accelerated by the COVID -19 pandemic, these markets helped us achieve continuous increases in sales and income. The profit ratio also improved.

Sales: 30,229 million yen (up 4,717 million yen, or 18.5％, from last year)

Operating income: 3,527 million yen (up 1,056 million yen, or 42.7％, from last year)

Air energy

business

・Sales of general-purpose air compressors grew mainly in China, as in the 2nd quarter.

・Sales of vacuum pumps also continued to grow mainly in Japan and East Asia.

Sales: 18,326 million yen (up 3,344 million yen, or 22.3 %, from last year)

(Reference)

Operating income: 2,028 million yen (up 704 million yen, or 53.2%, from last year)

Operating income ratio: 11.1 ％ (up 2.3 points from last year)

Coating business

・Sales of products, mainly spray guns, grew in the U.S., Europe, and China. ・Demand for airbrushes also continued.

Sales: 11,903 million yen (up 1,372 million yen, or 13.0 %, from last year)

(Reference)

Operating income: 1,499 million yen (up 352 million yen, or 30.7 %, from last year)

Operating income ratio: 12.6 ％ (up 1.7 points from last year)

(Notes) 1. The operating income by business was calculated using our unique standards.

2. In Japan and India, the year ends in March while in other areas, it ends in December, so that the period of the consolidated financial settlement in other areas differs

by three months.	2

Highlights of FY2021 3Q financial results

As in the 2nd quarter, income exceeded the pre-COVID levels.＊1

The U.S., European, Chinese, and Indian markets led increases in sales. The impact of fluctuations in foreign exchange rates was 1.1 billion yen.

The increase in the operating income ratio was due to the improved product mix and continued control of selling, general & administrative expenses.

＊1 Comparison with FY2019 3Q: Sales 28,201 million yen, up 7.2 %, operating income 2,845 million yen, up 24.0%

									FY2021 result
	FY2020 3Q	FY2021 3Q	Year-on-year		forecasts
									Revised forecast
									(Announced on Nov. 5, 2021)
	Actual	Profit ratio	Actual	Profit ratio	Increase/	Increase/	Profit ratio		Forecast	Progress rate
	decrease
	decrease rate	change
					amount
	million yen	％	million yen	％	million yen	％	Point		million yen	％
Sales	25,512	―	30,229	―	4,717	18.5	―		40,500	74.6
Operating	2,471	9.7	3,527	11.7	1,056	42.7	2.0		4,250	83.0
income
Ordinary	3,010	11.8	4,015	13.3	1,004	33.4	1.5		4,770	84.2
income
Net income
attributable to	1,941	7.6	2,533	8.4	592	30.5	0.8		2,960	85.6
parent company
shareholders
Average exchange	107.59 yen	108.50 yen	Depreciated by 0.91 yen		109.00 yen
rate of yen to the
US dollar
Average exchange	120.90 yen	129.83 yen	Depreciated by 8.93 yen		130.00 yen
rate of yen to the
euro
Average exchange	15.37 yen	16.78 yen	Depreciated by 1.41 yen
	16.80 yen
rate of yen to
RMB
											3

Analysis of causes of operating income increase/decrease

The growth in sales compensated for the cost increase resulting from increased activities, contributing to the rise in income.

1. Increase in sales: 30,229 million yen (up 4,717 million yen from last year)

1. Improvement in cost-to-sales ratio: 56.6％ (down 1.4 points from last year)
2. • Changes in the product mix (up for coating equipment and down for coating systems), increase in income of the U.S. subsidiary that acquired a business, etc.

1. Improvement in selling, general & administrative expenses ratio: 31.7％ (down 0.6 points from last year)
2. • Continued cost control through the use of the Web and optimization of face -to-face sales activities, etc.

[-]Increase in goodwill amortization: 189 million yen (up 36 million yen from last year)

• Acquisition of a business (sale of coating equipment) in the U.S., etc.

[-] Increase in commission fees included in other expenses (up 224 million yen from last year)

• The commission fees*1 related to IT investments are approx. 94 million yen.

			*1 Related to the order-receiving system including
Increase in gross				product information management, etc.
	Reduction		(million yen)
profit
	in
(Sales - costs)		retirement
+2,403
	benefit
		expenses
		+37		3,527
	Increase in	Increase in	Increase in
	payment of
	sales-	goodwill	Increase in
	salaries and
2,471	related	amortizati	other expenses
employee
expenses	on and	-305
benefits
	-206	other

-786	depreciatio
	n costs
	-85

FY2020 3Q	+1,056	FY2021 3Q
	4

Sales by area and by product

Sales of general-purpose products grew as the economy recovered in Asia and other areas, excluding the ASEAN region.

・Japan: While the delayed supply of compressor motors impacted us in October, our business slowly recovered after that, except for coating systems. As for coating systems, the backlog of unfulfilled orders for next year and beyond is increasing.

・Europe: The promotion for the car repair market continued, and the sales of coating equipment, mainly spray guns, grew. Sales of air compressors for cow milking increased as we marketed those products in the EU region. Sales of vacuum pumps recovered as well.

・Asia: Sales of air compressors in China as well as their export by SCR*1 remained brisk. Sales of vacuum pumps in East Asia and sales of coating equipment and systems in China drove the entire Asian market.

・North America, etc.: Sales of air compressors for the medical market in the U.S. and Brazil remained strong. Sales of coating equipment in the U.S. also continued to grow as a result of the partial acquisition of business in the car repair market.

＊1 SCR: Shanghai Screw Compressor Co., Ltd.

									■ Composition ratio
	FY2020	FY2021	Increase/	Increase/	Air energy business	Coating business	FY2021 3Q
					(FY2020 3Q)
(million yen)	decrease	decrease
3Q	3Q	Air	Vacuum	Coating	Coating
	amount	rate (%)
			compressor	equipment	equipment	system
					America, etc.
Japan	11,183	11,220	+37	+0.3
○	◎	◎	×		14.7%
										(13.7%)	Japan
Europe	3,311	4,104	+793	+24.0	〇	◎	◎	-
Europe		37.1%
Asia	7,519	10,470	+2,950	+39.2	◎	◎	◎	◎	13.6%		(43.8%)
(13.0%)
North	3,497	4,433	+936	+26.8	◎	◎	◎	×		Asia
America, etc.		34.6%
Total	25,512	30,229	+4,717	+18.5	◎	◎	◎	×		(29.5%)
Note) Converted to actual sales in each	◎ ≥ 10％, 3％ ≤ 〇< 10 ％, 0％< △< 3 ％,
individual area			0％ >▼ > -3％,-3％ ≥ ● > -10％,× ≤ -10％

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