OPTEX : Summary of Financial Results (Consolidated) for the Fiscal Year Ended December 2021

Feb. 14,2022

Summary of Financial Results (Japan GAAP)[Consolidated]

For the Fiscal Year Ended December 31,2021

Company name:	OPTEX GROUP CO.,LTD.
Stock exchange listing:	Tokyo Stock Exchange
Stock code:	6914
URL:	https://www.optexgroup.co.jp/en/
Representative :	Isamu Oguni, President / CEO
Contact:	Hiroyuki Onishi, Director / CFO
	Tel.[phone]

Scheduled date for ordinary general meeting of shareholders:	Mar. 25,2022	Scheduled date for dividend payment: Mar. 28,2022
Scheduled date for filing of securities report:		Mar. 25,2022
Supplementary materials to the financial statements have been prepared: Yes
Presentation will be held to explain the financial statements: Yes
1. Consolidated financial results for the fiscal year ended Dec. 31,2021 (From Jan.1 to Dec.31, 2021)
(1) Consolidated operating results						(Millions of yen rounded down)
		(Percentages indicate changes from the same period in the previous fiscal year.)
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
Fiscal year ended	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
Dec. 31,2021	45,866	31.6	4,630	120.7	5,130	135.7	3,762	169.7
Dec. 31,2020	34,846	(7.1)	2,098	(26.5)	2,176	(24.3)	1,395	(36.5)

(Note) Comprehensive income:	As of Dec. 31,2021: 4,756 million yen 277.0 %
	As of Dec. 31,2020: 1,261 million yen（41.2 %）
Basic earnings	Diluted earnings	Return on equity	Ordinary income	Operating income
per share	per share			to total assets	to net sales
Fiscal year ended	Yen	Yen		%		%	%
Dec. 31,2021	104.18	103.60		11.2	9.8	10.1
Dec. 31,2020	38.59	38.42		4.3	4.8	6.0
(Reference) Earnings of equity method:	As of Dec. 31,2021: 27 million yen
	As of Dec. 31,2020: 4 million yen
(2) Consolidated financial position
Total assets	Net assets		Shareholder's	Net assets per share
	equity ratio
As of	Millions of yen	Millions of yen		%		Yen
Dec. 31,2021	57,769	35,360		60.7		987.36
Dec. 31,2020	47,390	32,625		68.4		896.02
(Reference) Shareholders' equity:	As of Dec. 31,2021: 35,072 million yen
	As of Dec. 31,2020: 32,402 million yen
(3) Consolidated statement of cash flows
Cash flows from	Cash flows from		Cash flows from	Cash and cash equivalents
operating activities	investing activities		financing activities		at end of period
Fiscal year ended	Millions of yen	Millions of yen		Millions of yen		Millions of yen
Dec. 31,2021	3,102	(2,845)		1,793		17,120
Dec. 31,2020	3,894	(3,228)		1,578		14,583

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2. Dividends
		Dividends per share				Total		Payout	Dividend on
				dividends			ratio	net assets
(Base date)	End of Q1 End of Q2	End of Q3	End of FY	Full FY	(Annual)	(Consolidated)	(Consolidated)
Fiscal year ended	Yen	Yen	Yen		Yen	Yen	Millions of yen			%	%
Dec. 31,2020	－	15.00	－	15.00	30.00		1,084			77.7	3.4
Dec. 31,2021	－	15.00	－	15.00	30.00		1,075			28.8	3.2
Fiscal year ending	－	18.00	－	18.00	36.00					28.3
Dec. 31,2022 (Forecast)
3.Forecast of consolidated results for the fiscal year ending Dec. 31, 2022 (From Jan. 1 to Dec. 31, 2022)
						(Percentages indicate changes from the previous year.)
	Net sales	Operating income	Ordinary income	Profit attributable	Net income
	to owners of parent	per share
Fiscal year ending	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Jun. 30,2022 (Forecast)	26,100	14.7	2,850	13.1		2,900	2.1	2,150		11.9	59.53
Dec. 31,2022 (Forecast)	53,000	15.6	6,000	29.6		6,100 18.9	4,600		22.3	127.37

4. Others

(1) Material changes in subsidiaries during this period

(changes in scope of consolidations resulting from change is subsidiaries): None

1. Changes in accounting policies, changes in accounting estimates and retrospective restatements

1. Changes in accounting policies associated with revision of accounting standards: None
2. Other accounting policy changes: None
3. Changes in accounting estimates: None
4. Retrospective restatements: None

1. Number of issued and outstanding shares (common shares)

1. Number of issued and outstanding shares at the end of fiscal year (including treasury shares)

As of Dec. 31, 2021:	37,735,784 shares
As of Dec. 31, 2020:	37,735,784 shares
(b) Number of treasury shares at the end of fiscal year
As of Dec. 31, 2021:	2,214,684 shares
As of Dec. 31, 2020:	1,572,800 shares
(c) Average number of shares during the period
Year ended Dec. 31, 2021:	36,116,672 shares
Year ended Dec. 31, 2020:	36,156,759 shares

• Summary of Financial Results are not subject to audit procedures.
• Explanation for the proper use of earnings projections, and other notes

・Results forecasts are based on information available at the time of the publication of this summary. Actual results may differ from these projections due to various factors that may arise in the future. Please refer to "1. Overview of Operating Results, etc.

(4) Future prospects" for matters concerning the results forecasts stated above.

・Supplementary explanatory materials for financial results are scheduled to be posted on the Company's website within one week of the announcement of financial results.

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1. Overview of Operating Results, etc.

1. Overview of operating results for the fiscal year ended December 31, 2021

During the fiscal year under review, the global economy maintained its recovery as economic activities were resumed in line with the phased relaxation of restrictions on activities following progress in vaccination for combating the global COVID-19 pandemic. Meanwhile, the economic outlook remained uncertain with a worldwide shortage of semiconductors and electronic components and an intensified demand-supply imbalance in logistics.

Under these circumstances, the Group practiced its corporate philosophy, "Aim to become a corporate group with a strong venture spirit," with management policies of seeking synergy among the Group companies by strengthening the Group's headquarters functions and of accelerating expansion of existing businesses and new business rollouts.

For the fiscal year under review, the Group defined and carried out three key initiatives with the aim of continuously increasing corporate value. They are, first, strengthening collaboration among Group companies and improving organizational structures; second, facilitating cost-of-sales ratio reductions, cost reductions and business model transformations in existing businesses; and third, improving productivity per person through changes in behavioral patterns.

For the consolidated fiscal year under review, net sales reached a record high after increasing 31.6% year on year to 45,866 million yen. This was primarily a result of significant growth in existing main businesses and the effect of a new operating company. On the profit side, operating profit was 4,630 million yen, up 120.7% year on year. The sales growth resulted in a rise in gross profit that far exceeded the rise in selling, general and administrative expenses. Ordinary profit stood at 5,130 million yen, up 135.7% year on year, a new record high due chiefly to a rise in foreign exchange gains. Profit attributable to owners of parent was 3,762 million yen, up 169.7% year on year.

The business results for each segment are described below.

Effective from the consolidated fiscal year under review, new reportable segments and their names are in place. The following comparisons with the previous fiscal year have been made based on figures reclassified into the new classification segments. Details are presented in "1.

Summary of Reportable Segments" in "Notes on the Consolidated Financial Statements [Segment Information]" under "Consolidated Financial Statements."

• SS (Sensing Solution) Business

Net sales for the SS Business came to 20,164 million yen (up 15.9% year on year) and operating profit was 2,201 million yen (up 53.8% year on year).

Net sales for the security sensors were 13,652 million yen (up 18.2% year on year).

Net sales in overseas operations significantly exceeded the year-ago level, reflecting steady sales of outdoor sensors in the United States and Europe.

Net sales in domestic operations slightly increased year on year due to solid sales for security

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companies and large-scale critical facilities.

Net sales for the automatic door sensors amounted to 4,442 million yen (up 12.8% year on year), reflecting favorable overseas sales as well as steady domestic sales.

• IA (Industrial Automation) Business

In the IA Business, net sales came to 24,409 million yen (up 48.0% year on year) and operating profit was 2,700 million yen (up 148.6% year on year).

Net sales for FA-related products amounted to 9,711 million yen (up 32.9% year on year), the result of strong sales to the semiconductor, electronic component and secondary battery industries and significant growth both in domestic and overseas sales, mainly in China.

Net sales for MVL-related products came to 11,364 million yen (up 23.8% year on year), attributable to favorable sales to the semiconductor and electronic component industries as well as significant growth particularly in overseas sales.

Net sales for the IPC-related products amounted to 3,334 million yen. Starting from the consolidated fiscal year under review, results made by Sanritz Automation Co., Ltd., which became a consolidated subsidiary in December 2020, are included in IPC-related results in the IA Business.

* IPC: Industrial PC

• EMS (Electronics Manufacturing Service) Business

In the EMS Business, sales to unaffiliated customers were 756 million yen (up 60.5% year on year), attributable to an increase in projects for the electronic contract manufacturing service. Operating profit came to 310 million yen (up 366.8% year on year), reflecting an increase in the production volume of products within the Group. The margin of increase in operating profit was larger than in the previous fiscal year, given that operating profit is greatly influenced by inter- segment sales, which increased in the fiscal year under review.

During the consolidated fiscal year under review, the Company acquired all shares of Mitsutec Co., Ltd., which engaged in planning, development, manufacturing, sales and maintenance services for automation systems and image processing inspection systems, and made it a consolidated subsidiary. However, the deemed date of acquisition is December 31, 2021, and the consolidated statements of income for the fiscal year under review does not include its business results.

.

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1. Overview of financial position during the fiscal year ended December 31, 2021 (Assets)
   Total assets amounted to 57,769 million yen at the end of the fiscal year under review, which was an increase of 10,378 million yen from the end of the previous fiscal year.
   Current assets increased 9,477 million yen to total 42,544 million yen. This is due mainly to a rise in inventories, including raw materials and supplies, of 3,317 million yen, an increase in cash and deposits of 2,536 million yen following the reorganization of Mitsutec Co., Ltd. into a consolidated subsidiary in November 2021 and a hike in notes and accounts receivable - trade by 2,139 million yen thanks to sales growth.
   Non-current assets increased 900 million yen, to 15,224 million yen. This was primarily attributable to a decrease of 538 million yen in intangible assets such as customer relationships and trademark rights due to amortization and other factors, a rise of 826 million yen in property, plant and equipment including buildings and structures and growth of 612 million yen in investments and other assets.
   (Liabilities)
   Total liabilities stood at 22,408 million yen at the end of the fiscal year under review, which was an increase of 7,643 million yen from the end of the previous fiscal year. That resulted chiefly from an increase in short-term borrowings of 4,478 million yen associated with the borrowing of funds to acquire the shares of Mitsutec Co., Ltd., a rise in income taxes payable of 949 million yen and an increase in notes and accounts payable - trade of 627 million yen.
   (Net assets)
   Net assets totaled 35,360 million yen at the end of the fiscal year under review, which reflects an increase of 2,735 million yen from the end of the previous fiscal year. This result mainly reflected acquisition of treasury shares and others worth 996 million yen, an increase of 2,677 million yen in retained earnings and an increase in foreign currency translation adjustment of 958 million yen.
2. Overview of cash flow during the fiscal year ended December 31, 2021

Cash and cash equivalents ("cash") at the end of the fiscal year under review have increased by 2,536 million yen from the end of the previous fiscal year, to total 17,120 million yen.

The status of each of the cash flow segments and contributing factors for the fiscal year under review are as follows.

(Cash flow from operating activities)

Net cash provided by operating activities was 3,102 million yen (compared with 3,894 million yen in the same period of the previous fiscal year). Contributing factors included a decrease in cash due to an increase in inventories of 2,542 million yen, an increase in trade receivables of 1,983 million yen and income taxes paid of 878 million yen and an increase in cash after securing of 5,031 million yen in profit before income taxes.

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