Nitto Denko : Quarterly Financial Summary

Date: October 26, 2022

Summary of Consolidated Financial Statements

for the Second Quarter Ended September 30, 2022 (IFRS Basis)

Listed company name:	Nitto Denko Corporation
Stock exchange listing:	Tokyo Stock Exchange, Prime Market
Code Number:	6988	URL	https://www.nitto.com/
Company Representative:	Hideo Takasaki, President
Contact Person:	Yasuhiro Iseyama, Executive Vice President, Director of Corporate Accounting & Finance Division
Phone:	[phone]

Filing date of quarterly financial statements: Estimated starting date of dividend paying: Preparation of supplementary explanatory materials: Holding of quarterly earnings release conference:

October 28, 2022

November 25, 2022 Yes

Yes (for investment analysts and institutional investors)

								(All monetary values noted herein are rounded down to the nearest million yen)
1. Consolidated financial results of the first half ended September 30, 2022 (April 1, 2022 through September 30, 2022)
(1) Operating results										(% of change from same period in the previous year)
													Net income	Total
					Operating	Income before			attributable to
		Revenue		Net income	comprehensive
			income	income taxes	owners of the
							income
													parent company
		Millions		%	Millions		%	Millions	%	Millions	%	Millions	%	Millions		%
		of yen		of yen		of yen	of yen	of yen	of yen
First half ended		484,909		13.8	92,279			26.7	92,035	26.7	63,442	21.6	63,398		21.6	110,350		98.5
September 30, 2022
First half ended		425,951		19.1	72,808			71.8	72,648	73.7	52,189	70.7	52,138		70.7	55,584		96.3
September 30, 2021
		Basic earnings per share		Diluted earnings per share
					Yen				Yen
First half ended					428.29					428.12
September 30, 2022
First half ended					352.32					352.14
September 30, 2021
(2) Financial position
											Equity attributable to owners		Ratio of equity attributable to
		Total assets				Total equity			owners of the parent company
					of the parent company
													to total assets
				Millions of yen			Millions of yen		Millions of yen					%
September 30, 2022					1,201,280					912,038			911,107					75.8
March 31, 2022					1,094,469					822,105			821,192					75.0
2. Dividends
									Dividends per share
		1Q		2Q		3Q		Year-end	Annual
				Yen				Yen		Yen		Yen			Yen
March, 2022				-				110.00		-		110.00			220.00
March, 2023				-				120.00
March, 2023 (Forecast)										-		120.00			240.00

(Note) Revision of dividend forecast in the current quarter: No

3. Forecast for fiscal year ending March 31, 2023 (April 1, 2022 through March 31, 2023)

(% of change from same period in the previous year)

										Net income
	Revenue		Operating income	Income before	Net income	attributable to	Basic earnings
		income taxes	owners of the	per share
										parent company
	Millions		%	Millions	%	Millions	%	Millions	%	Millions	%	Yen
	of yen		of yen	of yen	of yen	of yen
Annual	955,000		11.9	160,000	21.0	160,000	20.9	115,000	18.3	115,000	18.4	776.96

(Note) Revision of consolidated forecast in the current quarter: No

• Others
• 1. Changes in significant subsidiaries during the second quarter ended September 30, 2022: No
  2. Changes in accounting policies applied and changes in accounting estimates
  3. 1. Changes in accounting policies required by IFRS: No
     2. Changes in accounting policies other than the above: No
     3. Changes in accounting estimates: No
  4. Number of shares outstanding (Common stock)
  5. 1. Number of shares outstanding at the end of the period (including treasury stock)

	September 30, 2022:	149,758,428	March 31, 2022: 149,758,428
2.	Number of treasury stock at the end of the period
	September 30, 2022:	1,719,993	March 31, 2022: 1,744,778
3.	Average number of outstanding shares during the period (cumulative from the beginning of the period)
	April-September 2022: 148,026,050	April-September 2021: 147,986,175

• These quarterly financial results are not subject to quarterly review procedures by Certified Public Accountants or audit firm.
• Explanations for adequate utilization of the forecast and other special matters

The forward-looking statements shown in this report, including the forecast, are prepared based on information available to the Company and on certain assumptions deemed reasonable as of the issuing date of the report. Consequently, the statements herein do not constitute promises regarding actual results by the Company. Actual results may differ materially from forecasted figures due to various unknown factors. For conditions regarding this forecast and precaution for use, please refer to "1. Qualitative Information Regarding Quarterly Settlement of Accounts (3) Explanation of forecasts and other projections" on page 7 of the Attachment to this summary of consolidated financial results.

(Reference) Consolidated financial results of the second quarter (three months) of the fiscal year ending March 31, 2023 (July 1, 2022 through September 30, 2022)

(All monetary values noted herein are rounded down to the nearest million yen) (% of change from same period in the previous year)

												Net income	Total
						Income before			attributable to
	Revenue	Operating income	Net income	comprehensive
	income taxes	owners of the
								income
												parent company
	Millions	%	Millions	%	Millions		%	Millions	%	Millions	%	Millions		%
	of yen	of yen	of yen		of yen	of yen	of yen
Second
quarter ended	268,540	20.8	53,758	24.8	53,360		24.1	36,984	18.1	36,959	18.1	49,191		49.7
Sept. 30, 2022
Second
quarter ended	222,235	14.3	43,088	72.9	43,004		74.9	31,319	69.1	31,293	69.1	32,868		93.2
Sept. 30, 2021
				Basic earnings per share		Diluted earnings per share
						Yen					Yen
Second quarter ended Sept. 30, 2022			249.66				249.56
Second quarter ended Sept. 30, 2021			211.44				211.34

(Attached Documents)
Index
1. Qualitative Information Regarding Quarterly Settlement of Accounts...................................................................................	2
(1)	Explanation of operating results........................................................................................................................................	2
(2)	Explanation of financial position.......................................................................................................................................	7
(3)	Explanation of forecasts and other projections..................................................................................................................	7
2. Quarterly Consolidated Financial Statements and Key Notes................................................................................................	8
(1)	Quarterly consolidated statements of financial position....................................................................................................	8
(2)	Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income............	10
(3)	Quarterly consolidated statements of changes in equity...................................................................................................	12
(4)	Quarterly consolidated statements of cash flows..............................................................................................................	13
(5)	Notes on quarterly consolidated financial statements.......................................................................................................	14
	(Notes on going concern assumption).........................................................................................................................	14
	(Segment information)................................................................................................................................................	14
	(Business combination)...............................................................................................................................................	16
	(Assets held for sale and directly related liabilities)...................................................................................................	18
	(Impairment losses)........................................................................................................................................................	18
	(Significant subsequent events)...................................................................................................................................	18

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1. Qualitative Information Regarding Quarterly Settlement of Accounts

1. Explanation of operating results

During the second quarter of the fiscal year ending March 31, 2023 (April 1, 2022 through September 30, 2022), the economic environment saw greater-than-expected depreciation of the yen, mainly against the U.S. dollar, due to a shift in monetary policy from loosening to tightening in countries and regions other than Japan with background of global inflation. In addition, the economic outlook is becoming increasingly uncertain due to the stagnation of economic activities resulting from the Zero-COVID policy in China and the prolonged military invasion of Ukraine by Russia.

In the key markets of Nitto Group (the "Group") under this economic environment, demand for our products for high-end smartphones and laptops grew. Demand for automotive materials recovered due to the easing of the impact of semiconductor shortages and other factors. In the nucleic acid drug market, demand for immunologic adjuvants for COVID-19 vaccines increased.

In response to COVID-19, the Group is working to continue supplying to customers while prioritizing everyone's health and safety and preventing the spread of infection. The Group will continue to make our utmost efforts to prevent any disruption in the provision of products and services to our customers.

The yen's exchange rate against the U.S. dollar for the second quarter ended September 30, 2022, was 131.3 yen to the dollar, a 19.8% depreciation of the yen compared with the same period of the previous year, and the effect of the weaker yen increased operating income by 38.5 billion yen.

As a result of the above, revenue increased by 13.8% from the same period of the previous year (changes hereafter are given in comparison with the same period of the previous year) to 484,909 million yen. Operating income increased by 26.7% to 92,279 million yen, income before income taxes increased by 26.7% to 92,035 million yen, net income increased by 21.6% to 63,442 million yen, and net income attributable to owners of the parent company increased by 21.6% to 63,398 million yen.

Summary of results by segment

• Industrial Tape

For Functional Base Products, sales increased from the same period of the previous year. Demand for assembly materials for high-end smartphones increased, and automotive materials and general industrial materials recovered from sluggish demand due to the impact of COVID-19 and semiconductor shortages in the previous fiscal year. On the other hand, the Group was affected by rising raw material prices and transportation costs due to the rising crude oil prices. In the automotive materials business, the Group agreed to transfer a portion of NVH (Noise, Vibration, Harshness) business to Parker Corporation and recorded an impairment loss on a portion of the related assets.

As a result of the above, revenue increased by 6.9% to 170,860 million yen and operating income decreased by 18.0% to 16,677 million yen.

• Optronics

In Information Fine Materials, revenue increased from the same period of the previous year. Demand for optical films for high-end laptops increased. Although the lockdown in China caused by the spread of COVID-19 in the first quarter of the fiscal year restricted production at the Group's base, manufacture and shipments recovered rapidly through the second quarter as the lockdown ended.

In Flexible Printed Circuits, sales increased from the same period of the previous year. Sales of high-precision circuits for high-end smartphones grew significantly due to an increase in the number of models in which they are adopted.

As a result of the above, revenue increased by 12.4% to 258,393 million yen and operating income increased by 51.0% to 72,604 million yen.

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