Amada : Consolidated Results for the Six Months Ended September 30, 2022(with script)

AMADA CO., LTD.

Financial Results Briefing for 2nd Quarter FY2022 (Presentation)

November 10, 2022

As you are all aware, there are growing concerns about a global recession this fiscal year due to accelerating inflation and sharp interest rate hikes. Against this backdrop of a high backlog of orders, revenue increased 19.4% YoY to JPY169.4 billion, landing above the Company's internal projection.

Operating income was JPY23.8 billion, up 35.6% YoY, due to the effect of increased sales and improved selling prices, as well as the impact of foreign exchange rates, despite the impact of price hikes for steel and other materials and increased distribution costs.

Profit was also up 29.1% YoY to JPY17 billion, marking a record high for H1 in terms of all three categories: revenue, operating income, and profit.

Although orders received in Q2 declined from the strong start of Q1, they were JPY101.4 billion, the second highest quarterly level after Q1. Orders received through H1 totaled to JPY205.2 billion, an 11.4% increase over the same period last year. The JPY205.2 billion in orders received was a record high for H1 and even on a half-year basis. As a result, the backlog of orders received totaled JPY182.8 billion, an increase of JPY44.8 billion from the end of the last fiscal year.

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Continuing on page two, I will explain the consolidated income statement results.

As mentioned at the beginning of this briefing, sales revenue was JPY169.4 billion, up 19.4% from the same period last year.

Gross profit was JPY74 billion, up 22.8% from the same period last year, and the gross profit margin was 43.7%. The gross profit margin improved by 1.2 percentage points from 42.5% in the same period of the previous year, partly due to the impact of foreign exchange rates, although the impact of higher-than-expected costs of steel and other materials was not offset by the 0.8 percentage point improvement in selling prices and the 0.2 percentage point effect of the capacity utilization ratio.

SG&A expenses totaled to JPY50.9 billion, up JPY7.6 billion from the same period last year, but the SG&A-to- sales ratio improved by 0.4 percentage points, from 30.5% to 30.1%. The variable cost ratio increased by 0.3 percentage points to 4.9% due to the impact of rising logistics costs in Japan and overseas, but it is generally in line with the plan. Fixed costs amounted to JPY42.5 billion, an increase of JPY5.8 billion from the same period last year.

The exchange rates were JPY133.98 for USD, JPY138.72 for EUR, and JPY19.88 for RMB, and the yen continued to depreciate, centered on the US dollar, which has been accelerating its interest rate hikes.

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Next, on page three, the trend of orders.

Orders received totaled to JPY205.2 billion, up 11% from JPY184.2 billion in the same period last year. As mentioned at the beginning.

In the sheet-metal Division, shown in the bar graph in the center, orders received in the same period of the previous year were up 65%, totaling to JPY136.4 billion, but in the current fiscal year, orders received were up another 10% totaling to JPY150.5 billion. Orders for machinery, shown in black, totaled to JPY110 billion, up 9% from JPY100.6 billion in the same period last year.

The right-hand side shows orders by region. While domestic orders totaled to JPY86.2 billion, a significant 18% increase over the same period last year, overseas orders totaled to JPY118.9 billion, a high level but only a 7% increase due to the high hurdles set in the previous year. Orders received in Japan, and North America reached record highs on a half-year basis.

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Next, page four is the results by business segment.

The metal working machinery segment, shown in the bar graph on the left, reported sales revenue of JPY138.8 billion, up 19% from JPY116.2 billion in the same period last year, and operating income of JPY19.6 billion, up 36% from JPY14.3 billion in the same period last year.

On the right side, the metal machine tools segment posted sales revenue of JPY29.9 billion, up 19% from JPY25 billion YoY, and operating income of JPY3.7 billion, up 34% from JPY2.7 billion YoY.

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