Consolidated Financial Statement : Second Quarter of 2023（331KB）

CONSOLIDATED FINANCIAL RESULTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 (J-GAAP)

	August 10, 2023
Name of listed company: MABUCHI MOTOR CO., LTD.	Stock exchange listing: Tokyo

Securities code: 6592 (URL: https://www.mabuchi-motor.com/)

Representative: Shinichi Taniguchi (Representative Director and President, COO)

Contact: Keiichi Hagita (Executive Officer, Chief Financial Officer)

Scheduled date of the filing of quarterly report: August 14, 2023

Scheduled date of start of dividends payments: September 11, 2023

Preparation of 2Q results presentation materials (Yes/No): Yes

Holding of 2Q results briefing meeting (Yes/No): Yes

(Amounts less than one million yen have been omitted.)

1. Consolidated Results for the Six Months Ended June 30, 2023 (From January 1, 2023 to June 30, 2023)

1. Consolidated Operating Results

(Percentages indicate year-on-year changes)

		Net sales		Operating income	Ordinary income		Profit attributable to
				owners of parent
For the six months ended		Millions of yen		%	Millions of yen	%	Millions of yen			%	Millions of yen		%
June 30, 2023		81,586		13.5	4,152	8.2	12,586			1.1	10,122		20.1
June 30, 2022		71,910		3.8	3,837	(55.6)	12,447			5.8	8,426		(0.9)
Note: Comprehensive income
Six months ended June 30, 2023: ¥29,248 million [(11.1)%] Six months ended June 30, 2022: ¥32,892 million [63.2%]
		Profit per share		Fully diluted
			profit per share
For the six months ended				Yen			Yen
June 30, 2023		156.58			156.54
June 30, 2022		129.89			129.86
(2) Consolidated Financial Position
		Total assets			Net assets				Equity ratio
As of				Millions of yen			Millions of yen						%
June 30, 2023					333,095			305,158						91.6
December 31, 2022					307,786			280,175						91.0
Reference: Shareholders' equity
As of June 30, 2023: ¥305,095 million		As of December 31, 2022: ¥280,105 million
2. Dividends
							Dividends per share
		1st quarter-end	2nd quarter-end	3rd quarter-end		Year-end		Total
			Yen			Yen		Yen					Yen		Yen
Fiscal 2022			―		67.00		―				68.00			135.00
Fiscal 2023			―		67.00
Fiscal 2023 (forecast)								―				83.00			150.00

Note: Amendments to dividend forecast that has been disclosed recently: Yes

Note: Breakdown of 2nd quarter-end dividend for fiscal 2022: Special dividend: ¥52.00 Breakdown of year-end dividend for fiscal 2022: Special dividend: ¥53.00

Breakdown of 2nd quarter-end dividend for fiscal 2023 (forecast): Special dividend: ¥52.00

Breakdown of year-end dividend for fiscal 2023 (forecast): Special dividend: ¥53.00

Breakdown of 2nd quarter-end dividend for fiscal 2023 (forecast): Commemorative dividend: ¥―

Breakdown of year-end dividend for fiscal 2023 (forecast): Commemorative dividend: ¥15.00

3. Consolidated Results Forecasts for the Fiscal Year (From January 1 to December 31, 2023)

(Percentages indicate year-on-year changes)

	Net sales		Operating income	Ordinary income	Profit attributable to	Profit per share
		owners of parent
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	173,000		10.4	13,000	20.1	21,100	(1.7)	16,200	13.3	250.61

Note: Amendments to results forecasts that have been disclosed recently: Yes

Notes

(1)	Changes in significant subsidiaries during the period (changes in specified subsidiaries that accompanied changes in the scope
	of consolidation): None
(2)	Application of accounting procedures specific to preparation of quarterly consolidated financial statements: Yes
(3)	Changes in accounting policies, changes in accounting estimates, restatements:
	1)	Changes in accounting policies resulting from revision of accounting standards, etc.: Yes
	2)	Changes in accounting policies due to reasons other than those stated in 1): None
	3)	Changes in accounting estimates: None
	4)	Restatements: None
(4)	Number of shares issued (common stock)
	1) Number of shares issued at the end of the period	Jun. 30, 2023		67,076,362	Dec. 31, 2022	67,076,362
		(including treasury stock)
	2) Number of shares of treasury stock at the end of the period	Jun. 30, 2023		2,401,935	Dec. 31, 2022	2,442,888
	3) Average number of shares during the period	Jan.-Jun. 2023		64,648,625	Jan.-Jun. 2022	64,870,618

• The quarterly review procedure by a Certified Public Accountant or an auditing firm does not apply these Consolidated Financial Results.
• Explanation related to appropriate use of results forecasts and other items warranting special mention
  The above forecasts are based on the information available as of the date of the release of this document. As a result, a variety of factors in the future may cause actual results to differ from these forecasts.

1. Qualitative Information

(1) Operating Results

During the six months ended June 30, 2023 (January 1-June 30, 2023), the global economy moved toward a normal economic activity on the easing of measures to prevent the spread of COVID-19, but high resource prices and weak retail consumption reflecting increases in prices meant that the recovery in economic activity was gradual.

In the United States, although inflation caused by factors including high resource prices slowed, higher interest rates depressed retail consumption and the economic recovery was only gradual. European economies had only a slow recovery as well, with energy-price-driven inflation and higher interest rates in each country leading to weak retail consumption. Although Japan saw some effect from inflation, the easing of COVID-19 prevention measures led to a gradual recovery as economic activity returned to normal. In emerging market economies, China's recovery in retail consumption from the lifting of zero-COVID policies proved short-lived, and with pressure from a weakening real estate market the overall recovery was only gradual.

With regard to markets related to the Mabuchi Group's products, the automotive products market saw a recovery in automobile production as shortages in supplies of semiconductors and other components eased, but at the same time there was an effect from weak retail consumption associated with inflation in various countries. The life and industrial products market slowed overall, from factors including weak retail consumption in the face of inflation and a pause in demand for certain applications with fewer people staying at home.

Against this backdrop, Mabuchi's motor sales declined 0.6% year on year in terms of volume, but with a 13.4% year-on-year increase in value. As a result, consolidated net sales for the first half were 81,586 million yen (a 13.5% increase year on year), and motor sales, which account for the majority of net sales, were 81,551 million yen (a 13.4% increase year on year).

Although operating income was negatively affected by higher costs from lower capacity utilization, there was a positive effect from improvements in sales prices and the product mix and from a weaker yen year on year, resulting in operating income of 4,152 million yen (an 8.2% increase year on year). Ordinary income was boosted by increases in operating income and interest income, but with a decrease in foreign exchange gains ordinary income was 12,586 million yen (a 1.1% increase year on year). Profit before income taxes was 13,342 million yen (an 11.3% increase year on year), which included gain on bargain purchase as a result of the acquisition of shares of Oken Seiko Co., Ltd. (the current MABUCHI MOTOR OKEN CO., LTD.), and profit attributable to owners of parent was 10,122 million yen (a 20.1% increase year on year).

The next section describes market trends and sales conditions categorized into separate markets for motors.

1) Automotive Products Market

Net sales rose to 63,234 million yen (a 20.4% increase year on year). Sales of medium-sized automotive motors grew on increased sales of motors for power window lifters and power seats from a recovery in automobile production as shortages in supplies of semiconductors and other components eased, combined with an increase in the number of models equipped with electric parking brakes using Mabuchi's motors. Sales of small automotive motors rose as well, with sales of motors for door lock actuators, door mirrors, and air conditioning damper actuators benefitting from the recovery in automobile production.

2) Life and Industrial Products Market

Net sales declined to 18,317 million yen (a 5.6% decrease year on year). Sales of motors for health and medical devices rose due to the contribution of sales of Mabuchi Oken, which was added to the scope of consolidation in the second quarter, but the negative effect of inflation on retail consumption and inventory adjustments as logistics returned to normal depressed sales of motors for home appliances, power tools and housing equipment.

(2) Financial Position

Total assets as of June 30, 2023, were 333,095 million yen, a 25,308 million yen increase from the end of the previous fiscal year. Major changes from the end of the previous fiscal year included increases of 10,196 million yen in cash and bank deposits, 9,978 million yen in property, plant and equipment, and 3,725 million yen in trade notes and accounts receivable.

Total liabilities increased 325 million yen from the end of the previous fiscal year, to 27,936 million yen. Major changes from the end of the previous fiscal year included increases of 1,041 million yen in accrued income taxes

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and 320 million yen in deferred tax liabilities-non-current, and decreases of 552 million yen in other current liabilities and 475 million yen in trade notes and accounts payable.

Total net assets increased 24,983 million yen from the end of the previous fiscal year, to 305,158 million yen. This included increases of 18,466 million yen in foreign currency translation adjustments and 5,666 million yen in retained earnings.

(3) Forward-Looking Statements Including Consolidated Results Forecast

With continued high inflation and interest rate increases to counter that inflation, economic activity is expected to stagnate and there are concerns of a slowdown in the global economy. Although the pace of growth in the U.S. economy is seen slowing from the effect of interest rate increases in response to higher prices, the economy is expected to remain solid, supported by strong retail consumption. In Europe, despite continued high inflation and interest rate increases to bring it under control, a gradual recovery in retail consumption is forecast as inflationary pressure eases from a lull in energy price increases. A gradual recovery is forecast for the Japanese economy as economic activity returns to normal following the easing of COVID-19 prevention measures, but with pressure on retail consumption as high resource prices strain household budgets. In emerging market economies, the pace of growth in China is seen slowing on a weak recovery in retail consumption, and with factors including global inflation, a slower pace of growth is forecast for emerging market economies overall.

With regard to markets related to the Mabuchi Group's products, the outlook for the automotive products market remains unclear; even though the effect on automobile production from shortages in supplies of semiconductors and other components is seen easing, the recovery is seen lacking strength from the effect of weaker demand in response to high inflation and interest rate hikes to combat inflation in various countries. In the life and industrial products market, although we are forecasting solid demand overall against a backdrop of continued stable demand for motors for health and medical devices, with the slowdown in retail consumption we anticipate weaker demand for motors for home appliances, power tools, housing equipment, and office equipment.

Against this backdrop, we are forecasting full-year consolidated net sales of 173.0 billion yen (a 10.4% increase from the previous year). In terms of profit, although we expect positive effects from improvements in sales prices and the product mix and from a weaker yen, we also foresee negative effects from higher costs due to lower capacity utilization and an increase in selling, general and administrative expenses. We are therefore forecasting operating income of 13.0 billion yen (a 20.1% increase from the previous year), with ordinary income of 21.1 billion yen (a 1.7% decrease from the previous year) and 16.2 billion yen in profit attributable to owners of parent (a 13.3% increase from the previous year).

Our dividend forecast is as announced on February 14; we intend to continue to pay a record-highfull-year dividend of 135 yen per share (an ordinary dividend of 30 yen and a special dividend of 105 yen) as a temporary measure in anticipation of a future improvement in earnings.

With an additional 15-yen commemorative dividend that we intend to pay at the end of the fiscal year to commemorate the 70th anniversary of the Company's founding, this brings the full-year dividend to a record- high 150 yen per share (an ordinary dividend of 30 yen, a special dividend of 105 yen, and a commemorative dividend of 15 yen). Our forecast is for an interim dividend of 67 yen per share (an ordinary dividend of 15 yen and a special dividend of 52 yen) and a year-end dividend of 83 yen per share (an ordinary dividend of 15 yen, a special dividend of 53 yen, and a commemorative dividend of 15 yen).

The exchange rate used to calculate first-half results was ¥134.85 to the U.S. dollar, and our second-half forecasts are based on a foreign exchange rate assumption of ¥140 to the U.S. dollar.

Note: The above forecasts were made based on information that is available at the present moment. Actual results may differ from expectations owing to various future factors, the main ones of which are as follows:

• Fluctuations in foreign exchange rates
• Changes in economic conditions and demand trends in our business areas
• Rapid technological innovations, such as new technologies or new products
• Fluctuations in market prices of copper, steel materials, rare earths, and other raw materials Note, however, that the factors that could affect our results are not limited to the above.
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2. Consolidated Financial Statements and Primary Notes

(1) Consolidated Balance Sheets

				(Millions of yen)
			As of	As of
			December 31, 2022	June 30, 2023
	Assets
	Current assets
	Cash and bank deposits		101,612	111,808
	Trade notes and accounts receivable	28,944	32,670
	Short-term investments		1,500	―
	Merchandise and finished goods	40,628	39,395
	Work in process		1,270	2,005
	Raw materials and supplies	19,494	21,111
	Other current assets		7,304	7,660
	Allowance for doubtful accounts	(201)	(104)
	Total current assets		200,554	214,546
	Fixed assets
	Property, plant and equipment
	Buildings and structures	57,540	61,725
	Accumulated depreciation		(34,938)	(37,745)
	Buildings and structures, net	22,601	23,980
	Machinery, equipment and vehicles		97,714	111,415
	Accumulated depreciation	(56,319)	(65,500)
	Machinery, equipment and vehicles, net		41,394	45,915
	Tools, furniture and fixture	24,439	27,657
	Accumulated depreciation		(20,595)	(23,814)
	Tools, furniture and fixture, net	3,843	3,843
	Land		6,726	7,132
	Construction in progress	15,819	19,492
	Total property, plant and equipment		90,386	100,364

Intangible assets

Goodwill

Other intangible assets

Total intangible assets

Investments and other assets Investment securities Deferred tax assets-non-currentOther investments and other assets Allowance for doubtful accounts

Total investments and other assets

Total fixed assets

Total assets

	2,853		3,063
	2,624		2,710
	5,477		5,773
	9,064		10,065
	707		591
	1,627		1,785
	(31)	(31)
	11,367		12,410
	107,231		118,548
	307,786		333,095

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