Sanden : Financial results briefing materials

Sanden Corporation

FY2023

Financial results briefing materials

February 26, 2024

Sanden Corporation

GM of Corp. Financial Mgmt. Div.

Junya Takahashi

© 2024 SANDEN CORPORATION

1/13

Agenda

1. Financial results for the fiscal year ending December 2023

2. Forecast for the fiscal year ending

December 2024

１６

© 2024 SANDEN CORPORATION

Agenda

1. Financial results for the fiscal year ending December 2023

1-1 Points of the financial results

1-2 Summary of consolidated financial results

1-3 Sales by region from the automotive systems business segment 1-4 Operating income (Year-on-year comparison)１６

1-5 Cash flows from operating activities(Year-on-year comparison)

1-6 Consolidated balance sheet(Year-on-year comparison)

© 2024 SANDEN CORPORATION

1-1. Points of the financial results

Financial results for Dec,2023

			Sales increased by JPY 3.6 billion (+2.0%) year-on-year.
			Excluding foreign exchange effects, revenues decreased by ¥ 5.1 billion (-2.9%).
	1		In real terms, excluding foreign exchange effects, sales in the automotive equipment business fell by ¥ 3.9 billion.
		Sales decreased due to the end of commercial rights for some models in Europe as a result of vehicle switching, and
			lower sales to major customers in China and Japan.
			In addition, the sale of a systems subsidiary in the previous year led to a decrease of ¥1.2 billion in revenues in other
			businesses.
			Operating income decreased by 5.3 billion yen year-on-year. The decrease in sales and the deterioration of the product
			mix sold were offset by foreign exchange gains, in addition to improvement measures including cost reductions and
			productivity improvements. However, the decline in income was attributed to investments for growth, primarily in future
	2		development, and provisions for quality expenses arising from the past.
			Excluding these special factors, the profit structure showed progress in improving profitability, with an increase of 0.6 billion
			yen year-on-year. Furthermore, in line with the formulation of the new medium-term plan, an extraordinary gain of 5.8
			billion yen was recorded due to a review of the provision for structural reforms. However, an impairment loss of 2.4 billion
			yen on fixed assets was recorded, resulting in a net loss attributable to the parent company of 3.4 billion yen.
			Operating cash flow increased by 19.5 billion yen year-on-year, reaching 9.4 billion yen. This significant improvement was
			attributed to inventory reduction and the early collection of accounts receivable resulting from the restoration of the
	3		previously disrupted supply chain. Additionally, there was an enhancement in working capital efficiency.
			While the shortage of semiconductors is easing for both customers and component manufacturers, concerns persist about
			the impact of the current Red Sea blockade on the supply chain. Therefore, we are actively promoting further logistics
			efficiency measures．
		4/13	© 2024 SANDEN CORPORATION

1-2.Summary of consolidated financial results

Financial results for Dec,2023

[In 100 million yen]

FY2022

FY2023

Ver Previous year

FY2022

FY2023

Ver Previous year

Oct-Dec

Oct-Dec

Jan-Dec 2022.

Jan-Dec 2023.

Ratioed

Ratioed

Difference

2022

2023

Difference

1,757

1,793

36

477

476

1

Sales

2.0%

（ ）

-0.3%

Operating

（

57

）

（

110

）

（

）

92.3%

（ ）

（

）

（

）

-1,967.6%

Profit

53

2

46

44

Ordinary

（

41

）

（

84

）

（

）

102.5%

（

）

（

）

（

）

-398.0%

Profit

42

12

62

49

Net income

（

16

）

（

34

）

（

）

108.2%

9

（

）

（

）

279.0%.

attributable to owners

17

16

25

of the parent company

US $

131 yen

141 yen

9 yen

138yen

144yen

6 yen

Exchange

EUR

138 yen

152 yen

14 yen

139yen

157yen

18 yen

*Exchange: average market rate.

5/13

© 2024 SANDEN CORPORATION

Financial results for Dec,2023

1-3. Sales by region from the automotive systems business segment

Net sales 178.0 billion yen, Increase4.8 billion yen

（Up 2% year-on-year）（Increase by 87 billion yen due to currency effects, real excluding foreign exchange -39）

2022 Comparative amounts

◼Regional sales(2022-2023comparison)[In 100 million yen] (Amounts excluding foreign exchange effects)

◼Composition by regions

		Europe
800		647
	594
600
		+53
400		(▲6)
		+9%
200
0

FY2022FY2023

Jan-DecJan-Dec

	China and Asia	Japan
800
600	790	▲9	781	8%
		(-21)
400		-1%.		(-1%)
200				Asian 18%		Europe
0				(±0%)	36%
			(+2%)
	FY2022		FY2023
	Jan-Dec		Jan-Dec

Japan

400

200	147	▲8	139
		(-10)
		-7%.
0

	Americas
400
				26%	12%
	200	+13	213	(-2%)
200			China	(+1%)
	(▲2)
				Americas
		+7%
0

FY2022	FY2023.	FY2022	FY2023		(%) is year-on-year change
Jan-Dec	Jan-Dec	Jan-Dec	Jan-Dec
			6/13	© 2024 SANDEN CORPORATION

1-4．Operating income (Year-on-year comparison)

Financial results for Dec,2023

[In 100 million yen]

	Previous FY	Current FY	Difference
Net sales	1,756	1,793	+36
Operating	(57)	(110)	(53)
Income

• Real terms revenue decline excluding foreign exchange effects and worsening profitability due to changes in the sales mix.
• Manufacturing cost improvements are progressing, but not enough to absorb sales fluctuations.
• Increased provision for quality costs arising from past
• Continued strengthening of development and other capabilities for future growth
• • Improvement in real terms excluding quality costs and growth investments: +0.6 billion yen year-on-year.

0

-20

-40

-60

-80

-100

-120

-140

＋18

▲57				＋4	＋5		▲51
		＋2
	▲17	▲6
		Price reduction -12		Cost reduction +14	Gross profit: +28
		Price negotiations +6		Raw materials -9	SG&A: -10
FY2022				Selling,
Scale/	Price	Productivity	Productivity	Cost down	Exchange	Real
Operating
general
configuration					basis
Income
etc.			administrative
(Results)			expenses

▲25

	▲34
Quality	Growth and
cost	Development
	Investment

▲110

FY2023

Operating

Income

(Results)

7/13	© 2024 SANDEN CORPORATION

1-5. Cash flows from operating activities(Year-on-year comparison)

Financial results for Dec,2023

Operating cash flow positive	[In 100 million yen]
	Equity Method Investment Gain/Loss-43
	Restructuring Reserve -58
	Product Warranty Reserve +18
Operating CF+94	Impairment losses +24	Investment CF -116	Finance CF +67
VAT receivable +24
140	Interest paid +13	North American
	Electric

120

100

80

FY12/2023

60

40

20

0

-20

-40

-60

100

50

FY12/20220

-50

-100

-150

-200

		Equipment
-31		Japanese Spiral
	Processing
116					■Operating CF：
94				Turning a profit
	-112	-10
		78	45	→ Shortening CCC

-41

50

Accounts

(22)

Cash

Receivable +36

-0

-4

Others

■ Investment CF：

Inventory

+66

Borrowin

Inc/Dec

Liabilities +13

MarketableInvestment

FCF

g Inc/Dec

Expansion

securities

Others

税前利益

減価償却

運転資金

その他

営業CF

設備投資

FCF

借入金純増減

財務その他

現預金増減

有価証券

投資

IBT

Depreciation

Working

Others

Operating

Investment

sale

→ Electric Control Equipment

capital

CF

Operating CF -101

Investment CF -45

Financial CF +58

45

15

■ Financial CF:

-6

external financing

Accounts

-154

Receivable -12

(88)

→Maintaining

(101)

Inventory -10

(146)

liquidity on hand

Liabilities +36

-17

Accrued Liabilities -18

-59

75

VAT receivable -18

Allowance for Doubtful Accounts

14

-25

Equity Method Investment

-0

Gain/Loss -34

Reversal of restructuring

FCF

税前利益

減価償却

運転資金 provisionsその-37他

営業CF

設備投資

有価証券

投資

借入金純増減

財務その他

現預金増減

8/13	© 2024 SANDEN CORPORATION

1-6. Consolidated balance sheet(Year-on-year comparison)

Financial results for Dec,2023

*Days are based on ending balance and sales in the last 3 months.

[In 100 million yen]

		Assets				Liabilities &
					Net Assets
	1,574	1,707	1,625			1,707	1,625
			1,574
Cash &	265			370
186	228			381
deposits		Accounts payable 357	(74 days)
	349		(72 days)
Accounts	342	336		(67 days)
(70 days)
receivable (65 days)	(64 days)
			570
		352	313	Borrowing	490	572
Inventory	356	(304)
(71 days)	(59 days)	(Net Debt)
assets	(67 days)	(304)	(345)
	89
Others	134	141

			Other
Fixed assets	556	600	659
			Net assets

493	538	464

234

(14.8%)

229

(13.4%)

208

(12.8%)

2022/12	2023/6	2023/12	2022/12	2023/6	2023/12
USD:133	USD:145	USD:142	(Equity capital	223%)	(Equity capital 225)	(Equity capital 213)
EUR:142	EUR: 158	EUR:157
(14.2%)		(13.2%)	(13.1%)

9/13	© 2024 SANDEN CORPORATION

Agenda

2. Forecast for the fiscal year ending December 2024

2-1 Summary of consolidated financial forecast

2-2 Sales by region from the automotive systems business segment

2-3 Operating income

１６

© 2024 SANDEN CORPORATION