Consolidated Financial Statement : First Quarter of 2023（306KB）

CONSOLIDATED FINANCIAL RESULTS

FOR THE THREE MONTHS ENDED MARCH 31, 2023 (J-GAAP)

	April 27, 2023
Name of listed company: MABUCHI MOTOR CO., LTD.	Stock exchange listing: Tokyo

Securities code: 6592 (URL: https://www.mabuchi-motor.com/)

Representative: Shinichi Taniguchi (Representative Director and President, COO)

Contact: Keiichi Hagita (Executive Officer, Chief Financial Officer)

Scheduled date of the filing of quarterly report: May 15, 2023

Scheduled date of start of dividends payments: -

Preparation of 1Q results presentation materials (Yes/No): Yes

Holding of 1Q results briefing meeting (Yes/No): No

(Amounts less than one million yen have been omitted.)

1. Consolidated Results for the Three Months Ended March 31, 2023 (From January 1, 2023 to March 31, 2023)

1. Consolidated Operating Results

(Percentages indicate year-on-year changes)

	Net sales		Operating income	Ordinary income	Profit attributable to
		owners of parent
For the three months ended	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%
March 31, 2023	38,817		10.3	1,819	(32.7)	4,049	(17.8)	3,448	12.7
March 31, 2022	35,179		(0.8)	2,704	(48.4)	4,924	(32.7)	3,058	(46.9)
Note: Comprehensive income
Three months ended March 31, 2023: ¥7,843 million [(47.3)%] Three months ended March 31, 2022: ¥14,872 million [(4.6)%]
	Profit per share	Fully diluted
	profit per share
For the three months ended			Yen		Yen
March 31, 2023			53.35		53.34
March 31, 2022			46.97		46.96

(2) Consolidated Financial Position

	Total assets	Net assets		Equity ratio
As of		Millions of yen	Millions of yen		%
March 31, 2023		308,066	283,622		92.0
December 31, 2022		307,786	280,175		91.0
Reference: Shareholders' equity
As of March 31, 2023: ¥283,553 million	As of December 31, 2022: ¥280,105 million

2. Dividends

			Dividends per share
	1st quarter-end	2nd quarter-end	3rd quarter-end	Year-end	Total
	Yen	Yen	Yen	Yen	Yen
Fiscal 2022	―	67.00	―	68.00	135.00
Fiscal 2023	―
Fiscal 2023 (forecast)		67.00	―	68.00	135.00

Note: Amendments to dividend forecast that has been disclosed recently: None

Note: Breakdown of 2nd quarter-end dividend for fiscal 2022: Special dividend: ¥52.00

Breakdown of year-end dividend for fiscal 2022: Special dividend: ¥53.00

Breakdown of 2nd quarter-end dividend for fiscal 2023 (forecast): Special dividend: ¥52.00

Breakdown of year-end dividend for fiscal 2023 (forecast): Special dividend: ¥53.00

3. Consolidated Results Forecasts for the Fiscal Year (From January 1 to December 31, 2023)

(Percentages indicate year-on-year changes)

	Net sales		Operating income	Ordinary income	Profit attributable to	Profit per share
		owners of parent
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Six months	85,900		19.5	6,900	79.8	7,800	(37.3)	5,400	(35.9)	83.55
Full year	173,000		10.4	15,000	38.6	16,800	(21.8)	11,900	(16.8)	184.12

Note: Amendments to results forecasts that have been disclosed recently: None

Notes

(1)	Changes in significant subsidiaries during the period (changes in specified subsidiaries that accompanied changes in the scope
	of consolidation): None
(2)	Application of accounting procedures specific to preparation of quarterly consolidated financial statements: Yes
(3)	Changes in accounting policies, changes in accounting estimates, restatements:
	1) Changes in accounting policies resulting from revision of accounting standards, etc.: Yes
	2) Changes in accounting policies due to reasons other than those stated in 1): None
	3) Changes in accounting estimates: None
	4) Restatements: None
(4)	Number of shares issued (common stock)
	1) Number of shares issued at the end of the
	Mar. 31, 2023	67,076,362	Dec. 31, 2022	67,076,362
	period (including treasury stock)
	2) Number of shares of treasury stock at the
	Mar. 31, 2023	2,436,206	Dec. 31, 2022	2,442,888
	end of the period
	3) Average number of shares during the period	Jan.-Mar. 2023	64,634,582	Jan.-Mar. 2022	65,120,652

• The quarterly review procedure by a Certified Public Accountant or an auditing firm does not apply these Consolidated Financial Results.
• Explanation related to appropriate use of results forecasts and other items warranting special mention
  The above forecasts are based on the information available as of the date of the release of this document. As a result, a variety of factors in the future may cause actual results to differ from these forecasts.

1. Qualitative Information

(1) Operating Results

During the three months ended March 31, 2023 (January 1-March 31, 2023), the global economy moved toward a normalization of economic activity as measures to prevent the spread of COVID-19 were eased, but sharply higher resource prices and semiconductor supply shortages, along with weak retail consumption in response to higher prices, meant that the recovery in economic activity was only gradual. Although the U.S. economy saw a slower rate of resource price-driven inflation, the Fed's raising of interest rates created financial uncertainty, and as a result the recovery in retail consumption was only modest. European economies also experienced only gradual recoveries, as inflation driven by sharply higher energy prices and higher interest rates in each country depressed retail consumption. The Japanese economy had a gradual recovery, as the easing of COVID-19 prevention measures led to a normalization of economic activity. Emerging market economies experienced a gradual recovery overall, led by growth in retail consumption in China from the lifting of the zero-COVID policies.

With regard to markets related to the Mabuchi Group's products, the automotive products market was affected by factors including automobile production adjustments in response to shortages of semiconductor supplies, the conclusion of China's policy of providing subsidies for the purchase of vehicles powered by new types of energy, and weak retail consumption associated with inflation in various countries. The life and industrial products market slowed overall, from inflation-driven weakness in retail consumption and a lull in demand for certain applications from people who had been staying at home instead of going out.

Against this backdrop, Mabuchi's motor sales declined 6.2% year on year in terms of volume, but rose 10.3% year on year in value. These figures were 7.6% below the initial first-quarter plan for volume, and 8.0% below in terms of value. As a result, consolidated net sales for the first quarter were 38,817 million yen (a 10.3% increase year on year), and motor sales, which account for the majority of net sales, were 38,800 million yen (a 10.3% increase year on year).

Although operating income was boosted by factors including a weaker yen year on year and improvements in sales prices and the product mix, these were more than offset by negative factors including lower sales volume and higher costs, resulting in operating income of 1,819 million yen (a 32.7% decrease year on year). With this decline in operating income, ordinary income was 4,049 million yen (a 17.8% decrease year on year). Profit before income taxes was 4,583 million yen (a 5.4% decrease year on year), which included gain on bargain purchase as a result of the acquisition of Oken Seiko Co., Ltd., and profit attributable to owners of parent was 3,448 million yen (a 12.7% increase year on year).

The next section describes market trends and sales conditions categorized into separate markets for motors.

1. Automotive Products Market
   Net sales grew to 30,330 million yen (a 17.5% increase year on year). Medium-sized automotive motors recorded

overall sales growth, with a strong recovery in sales of motors for power seats in the North American, European, and Chinese markets, and solid sales of motors for power window lifters and motors for electric parking brakes. Sales of small automotive motors also grew overall, with motors for door mirrors growing despite inventory adjustments in certain regions, and solid sales of door lock actuators, air conditioning damper actuators, and headlight level adjusters.

1. Life and Industrial Products Market
   Net sales declined to 8,470 million yen (a 9.6% decrease year on year). Sales of motors for health and medical

devices and for office equipment were solid, but demand for motors for personal care products, home appliances, power tools and housing equipment decreased on a lull in demand from people staying at home instead of going out, for an overall decline.

(2) Financial Position

Total assets as of March 31, 2023, were 308,066 million yen, a 280 million yen increase from the end of the previous fiscal year. Major changes from the end of the previous fiscal year included increases of 3,674 million yen in property, plant and equipment, and 851 million yen in trade notes and accounts receivable, as well as decreases of 2,311 million yen in cash and bank deposits, 1,500 million yen in short-term investments, and 744 million yen in inventories.

Total liabilities decreased 3,167 million yen from the end of the previous fiscal year, to 24,443 million yen. Major changes from the end of the previous fiscal year included decreases of 2,087 million yen in other current liabilities and 1,262 million yen in trade notes and accounts payable.

- 1 -

Total net assets increased 3,447 million yen from the end of the previous fiscal year, to 283,622 million yen. This included a 4,242 million yen increase in foreign currency translation adjustments and a 975 million yen decrease in retained earnings.

(3) Forward-Looking Statements Including Consolidated Results Forecast

With the easing of measures to prevent the spread of COVID-19, the global economy is moving toward the normalization of economic activity, but with high resource prices, shortages in semiconductor supplies, and the effects of interest rate hikes to counter inflation in various countries seen stagnating economic activity, there are concerns of an economic slowdown. Slower growth is forecast for the U.S. economy from the effects of higher prices and interest rate hikes to keep price increases in check. Slower growth is forecast for Europe as high inflation dampens retail consumption. In Japan, retail consumption is being constrained by the increased burden on household finances from factors including high resource costs, but with the easing of COVID-19 prevention measures a gradual recovery is forecast as economic activity returns to normal. In emerging market economies, although a recovery from economic stagnation is forecast for China as it eases its zero-COVID policies, with factors including global inflation, the pace of growth for emerging market economies as a whole is seen slowing.

With regard to markets related to the Mabuchi Group's products, the outlook for the automotive products market is unclear; even though the effect on automobile production from shortages of semiconductors and other components is seen easing, demand is seen weakening on high inflation and interest rate hikes to combat inflation in various countries. In the life and industrial products market, although we are forecasting solid demand overall against a backdrop of continued stable demand for motor for health and medical devices, with the slowdown in retail consumption demand for motor for home appliances, power tools, housing equipment, and office equipment is seen remaining flat.

Against this backdrop, our forecasts for consolidated results and dividends are unchanged. Going forward, if extremely major changes emerge in our operating environment, we will review our forecasts for operating results as appropriate and promptly disclose any changes to these forecasts.

Our forecasts are based on a foreign exchange rate assumption of ¥135 to the U.S. dollar, which is unchanged from the initial forecasts.

Note: The above forecasts were made based on information that is available at the present moment. Actual results may differ from expectations owing to various future factors, the main ones of which are as follows:

・Fluctuations in foreign exchange rates

・Changes in economic conditions and demand trends in our business areas ・Rapid technological innovations, such as new technologies or new products

・Fluctuations in market prices of copper, steel materials, rare earths, and other raw materials Note, however, that the factors that could affect our results are not limited to the above.

- 2 -

2. Consolidated Financial Statements and Primary Notes

(1) Consolidated Balance Sheets

				(Millions of yen)
			As of	As of
			December 31, 2022	March 31, 2023
	Assets
	Current assets
	Cash and bank deposits		101,612	99,300
	Trade notes and accounts receivable	28,944	29,796
	Short-term investments		1,500	―
	Merchandise and finished goods	40,628	38,829
	Work in process		1,270	1,608
	Raw materials and supplies	19,494	20,211
	Other current assets		7,304	7,107
	Allowance for doubtful accounts	(201)	(98)
	Total current assets		200,554	196,756
	Fixed assets
	Property, plant and equipment
	Buildings and structures	57,540	59,308
	Accumulated depreciation		(34,938)	(36,299)
	Buildings and structures, net	22,601	23,008
	Machinery, equipment and vehicles		97,714	103,357
	Accumulated depreciation	(56,319)	(60,377)
	Machinery, equipment and vehicles, net		41,394	42,979
	Tools, furniture and fixture	24,439	26,477
	Accumulated depreciation		(20,595)	(22,645)
	Tools, furniture and fixture, net	3,843	3,832
	Land		6,726	7,022
	Construction in progress	15,819	17,217
	Total property, plant and equipment		90,386	94,060

Intangible assets

Goodwill

Other intangible assets

Total intangible assets

Investments and other assets Investment securities Deferred tax assets-non-currentOther investments and other assets Allowance for doubtful accounts

Total investments and other assets

Total fixed assets

Total assets

	2,853		2,839
	2,624	2,577
	5,477		5,416
	9,064		9,293
	707	558
	1,627		2,011
	(31)	(31)
	11,367		11,831
	107,231	111,309
	307,786		308,066

- 3 -