Daido Metal : FY2020 First Quarter Consolidated Financial Results Highlights

August 7, 2020

Daido Metal Co., Ltd.

FY2020 First Quarter Consolidated Financial Results Highlights

1．Overview

1st Quarter (YTD)	Actual
Financial Results	2019/6	2020/6
Net sales	25,482	18,870
Operating profit	1,144	- 1,054
(Operating margin)	(4.5%)	(-5.6%)
Ordinary profit	1,075	- 1,403
(Ordinary income margin)	(4.2%)	(-7.4%)
Profit attributable to owners of parent	498	- 1,151
(Net profit margin)	(2.0%)	(-6.1%)
Return on Equity (ROE) ＊1	3.5%	- 8.4%
Net assets to total assets	35.0%	33.1%
Net interest bearing debt	40,981	37,334
Capital Expenditure	2,438	1,688
Depreciation	2,207	2,088
R&D expenses	500	451
Number of consolidated subsidiaries	33	33
Exchange rate (USD)	110.99	108.83
Exchange rate (EUR)	124.56	119.55
＊1 Annualized

(Unit: JPY Million)

Year-on-year comparison

Amount	%
- 6,611	- 25.9%
- 2,199	-
(-10.1%)	-
- 2,479	-
(-11.7%)	-
- 1,650	-
(-8.1%)	-
- 12.0%	-
- 1.9%	-
- 3,647	- 8.9%
- 750	-30.8%
- 119	-5.4%
- 49	-9.8%
0	-

Exchange rate is TTM rate as of March 31.

≪Causes of Fluctuation in Operating profit≫				≪Dividend/ Dividend Payout Ratio≫
			(Unit: JPYBillion)
						The forecast of dividends for the fiscal year ending March 31,
						2021 is not available at this moment.
										(Unit: JPY)
							2017/3	2018/3	2019/3	2020/3	2021/3
						Interim	15	15	15	＊20
						Year-end	15	15	15	15	Not
											available
						Annual	30	30	30	35
						Dividend	54.0%	33.3%	32.0%	60.1%
						Payout Ratio
						＊ The interim dividend for FY2019
						: Regular dividend (15 yen) + Commemorative dividend (5 yen)

≪Forecast of FY2021 financial results≫

As for Consolidated Financial Results for full year, forecast is not available at this moment due to uncertain circumstances caused by the worldwide spread of the new coronavirus (COVID-19). Consolidated Financial Results Forecast for full year will be announced when more detailed information is available.

2．Consolidated Financial Results/Capital Expenditure and Depreciation

(Unit: JPYBillion)	(Unit: JPYBillion)	(Unit: JPYBillion)	(Unit: JPYBillion)
Net sales	Operating profit/Operating margin	Ordinary profit/Ordinary income margin	Capital Expenditure/Depreciation

	106.6	107.7			8.0			7.2		Operating profit						Ordinary profit									Capital Expenditure	Depreciation
			100.1				6.6		Operating margin	12.0%	8.0		6.8		Ordinary income margin
					7.0						7.0		6.6				12.0%	12.3
85.0					6.0						10.0%	6.0														10.8	9.5
						4.7							5.0						10.0%			8.6	8.7		8.5
					5.0			4.1			5.0										7.2
										8.0%					3.6					6.7
					4.0			6.7%									8.0%
												4.0
					3.0						6.0%			6.4%	6.2%			6.0%
											3.0
							6.2%					5.9%														1.6	2.0
					2.0					2.0
						5.5%
					1.0				4.0%	1.0							4.0%
				18.8					4.2%						3.7%			Capital Expenditure	Depreciation	Capital Expenditure	Depreciation	Capital Expenditure	Depreciation	Capital Expenditure	Depreciation	Capital Expenditure	Depreciation
				0.0						2.0%	0.0							2.0%
					-1.0					-1.0	(1.0)
										-5.6%							-7.4%	-1.4
					-2.0					0.0%	(2.0)						0.0%
2017/3	2018/3	2019/3	2020/3	2020/6		2017/3	2018/3	2019/3	2020/3	2020/6			2017/3	2018/3	2019/3	2020/3	2020/6		2017/3	2018/3	2019/3	2020/3		2020/6
													- 1 -

3．Sales and Operating profit by Segment

(before elimination of inter-segment transactions)

																																							Operating profit or loss
		Net sales
（	Unit: JPYBillion）																																（Unit: JPYBillion）
			1.6																		Net sales		Operating profit or loss
15		14.4			10.4																			1.5
10											0.7																															1.0
5									0.3		4.5		3.4			0.3				0.3			3.7															0.5
																0.2		2.4		2.5								2.2			0.1				0.1
																																					0.6			0.5
0																																													0.0
																										-0.01
																																													-0.5
																																	-0.6
																																													-1.0
		2019/6		2020/6	2019/6	2020/6	2019/6	2020/6	2019/6		2020/6		2019/6		2020/6
					Automotive																																*
							Automotive			Non-automotive			Other automotive parts
														Others
					engine bearings			non-engine bearings				bearings

* "Others"includes electrode sheets for electric double layer capacitors, themetallicdry bearings business, pump-related products businesses, and real estateleasing.

4．Sales and Operating profit by Region

(before elimination of internal transactions)

	Net sales																										Operating profit or loss
（Unit: JPYBillion）																										（Unit: JPYBillion）
17	17.0		12.2											Net sales			Operating profit or loss		1.1
12									7.2																									0.6
7												0.4		5.3		3.3 0.2	3.0			3.5
2			0.2														0.001	0.08	2.7	0.02		0.1
														-0.1
																																		-0.4
																																		-0.9
					-1.2																										-1.4
2019/6		2020/6		2019/6		2020/6	2019/6	2020/6		2019/6			2020/6
												Asia						North America					Europe
			Japan

											August 7, 2020
										Daido Metal Co., Ltd.
				[Sales]		(+)Gains (-)Losses	(Unit: JPY Million)	[Operating profit] (+)Gains (-)Losses (Unit: JPY Million)
		Ne t s ale s ratio	Year-on-year				Year-on-year
		comparison					comparison
Segment					Causes of Gains and Losses		Causes of Gains and Losses
	2020/6		Amount			Amount
			(%)					(%)
						(-)Japan: Significant decrease of production adjustments by passenger car
						manufacturers due to COVID-19
						(-)Japan: Continued decrease in demand from trucks for exports(Mainly for			(-)Decrease due to COVID-19
						Southeast Asia and Indonesia)
Automotive				- 3,916				- 1,273		(+)Korea : Profit increase due to increased sales
	54.3%			(-)Orders decrease for turbocharger bearings
engine bearings			(-27.2%)			(-77.3%)		/Recovered earnings
				(-)China: Significant decrease by production adjustments due to COVID-19
						(-)Thailand: Significant decrease of the domestic market shrink and
						decrease in exports to overseas from Thailand
						(+)Korea: Increase orders for small SUVs
Automotive				- 1,121		(-)Japan,China: Significant decrease of production adjustments by auto		- 460
	17.8%			parts manufacturers due to COVID-19			(-)Decrease due to COVID-19
non-engine bearings			(-24.6%)			(-63.4%)
				(-)Europe: Decrease in sales due to Dieselgate issue
						(-)Decrease due to falling demand for low-speed diesel engines bearings
Non-automotive				99		(+)Development of ship-related businesses overseas (China and Korea)	0		(-)Decrease of low-speed diesel engines bearings
	13.4%			(-)Weak demand from construction machinery sector in overseas market
bearings			(4.0%)		( - )		(+)Increase for energy sector
				(China, North America, Asia)
						(+)Increase orders of steam turbines for the energy sector
						(-)Iino Group: Decrease due to COVID-19 globally				(-)Iino Group: Decrease due to COVID-19
Other automotive		11.7%		- 1,525		(-)Weak demand of Thailand's auto industry, decrease for alminum die		- 647		(-)Decrease in sales alminum die cast products due to
parts			(-40.2%)		cast products by the suspension of plant operations due to COVID-19 and	( - )		COVID-19 incl, increasing depreciation for DMCT
						significant decrease in automobile exports to overseas from Thailand				(New factory for alminum die cast parts in Thailand)
Others		2.7%		- 96		(-)Demand decrease for special types of bearings from general industory	- 31		(-)Decrease due to COVID-19
		(-15.5%)		sector			(-23.5%)
Elimination of				- 50					215
inter-segment transactions
Total			- 6,611		(-)Fluctuations in exchange rate			- 2,199
		(-25.9%)				( - )
			[Sales]	(+)Gains (-)Losses	(Unit: JPY Million)	[Operating profit] (+)Gains (-)Losses (Unit: JPY Million)
	Ne t sale s ratio		Year-on-year				Year-on-year
		comparison				comparison
Region					Causes of Gains and Losses		Causes of Gains and Losses
		2020/6		Amount					Amount
		(%)					(%)
					(-)Japan: Significant decrease of production adjustments by passenger car
					manufacturers due to COVID-19
					(-)Continued decrease in demand from trucks for exports (Mainly for			(-)Decrease due to COVID-19
					Southeast Asia and Indonesia)
			- 4,888			- 1,546	(-)Decrease of material exports to overseas subsidiaries
Japan		52.3%	(-)Orders decrease for turbocharger bearings
	(-28.6%)		(-)	due to demand decrease
			(-)Decrease due to falling demand for low-speed diesel engines bearings
					(-)Weak demand from construction machinery sector in overseas market
					(China,North America, Asia)
					(-)Iino: Substantial decrease by production adjustment due to COVID-19
										(+)Korea : Profit increase due to increased sales /Recovered
					(-)China: Significant decrease by production adjustments due to COVID-19			earnings
							(-)Thailand: Significant decrease of the domestic market shrink
					(+)Korea: Increase orders for small SUVs
			- 1,921			- 659	and decrease in exports to overseas from Thailand due to
Asia		23.0%	(-)Weak demand from Thailand's auto industry, decrease for alminum die
	(-26.4%)		(-)	COVID-19
			cast products by the suspension of plant operations due to COVID-19 and
							(-)Decrease in sales alminum die cast products due to
					significant decrease in automobile exports to overseas from Thailand
							COVID-19 incl, increasing depreciation for DMCT (New
										factory for alminum die cast parts in Thailand)
			- 378	(-)Decrease by production adjustments due to COVID-19 and decrease in		- 252
North America		12.9%	sales related to construction machinery			(-)Decrease due to COVID-19
	(-11.2%)			(-99.3%)
			(-)Iino Group: Decrease by production adjustments due to COVID-19
Europe			- 797	(-)Decrease due to Dieselgates issue			-64	(-)Decrease in automobile-related sales due to Dieselgate
	11.9%	(-)Decrease in sales for turbocharger bearings		issue
(including Russia)		( - )		(-76.4%)
		(+)Increased orders in Russia			(+)Russia: Increase in sales
Elimination of			1,374					324
internal transactions
Total			- 6,611	(-)Fluctuations in exchange rate			- 2,199
		(-25.9%)			(-)

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