TS TECH : Consolidated Financial Summary for the First Quarter of FY2021 (under IFRS)

Consolidated Financial Summary

First Quarter of FY2021

(April 1, 2020 - June 30, 2020)

This document is an English translation of the Japanese language version of the consolidated financial summary that TS TECH Co., Ltd. has produced as a reference purpose.

In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Consolidated Financial Summary for the First Quarter of FY2021

(under IFRS)

				July 31, 2020
Company name:	TS TECH CO., LTD.	Stock exchange listing: Tokyo Stock Exchange
Stock code:	7313	URL: https://www.tstech.co.jp
Representative:	Masanari Yasuda, President
Contact:	Yoshitoshi Goma, Manager,		Tel. [phone]
Public Relations Section, Administration Department
Scheduled date for filing of quarterly securities report:	August 6, 2020
Scheduled date of commencement of dividend payment:	─
Preparation of supplementary explanatory material:	Yes
Quarterly results briefing:		Yes (for institutional investors and analysts)

(Amounts of less than one million yen are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Quarter of FY2021 (April 1, 2020 - June 30, 2020)

(1) Consolidated Financial Results (Cumulative Total)

(%: year-on-year change)

Operating

Income before

Income attributable to

Total

Revenue

Net income

comprehensive

income

tax

owners of parent

income

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Million yen

%

First quarter of

54,739

-45.7

(1,792)

─

(1,221)

─

(1,956)

─

(3,757)

─

(480)

─

FY2021

First quarter of

100,722

-2.9

10,374

4.1

10,942

3.8

8,032

10.4

6,383

14.3

2,676

-57.5

FY2020

Basic earnings

Diluted earnings

per share

per share

Yen

Yen

First quarter of FY2021

(55.26)

─

First quarter of FY2020

93.87

─

(2) Consolidated Financial Position

Equity attributable to

Ratio of equity

Equity attributable to

Total assets

Total equity

attributable to owners

owners of parent

owners of parent

of parent to total assets

per share

Million yen

Million yen

Million yen

%

Yen

First quarter of

338,527

267,012

249,511

73.7

3,669.42

FY2021

FY2020

341,820

274,552

254,745

74.5

3,746.40

2. Cash Dividends

Annual cash dividends per share

End of 1Q

End of 2Q

End of 3Q

End of year

Annual

Yen

Yen

Yen

Yen

Yen

FY2020

─

43.00

─

43.00

86.00

FY2021

─

FY2021 (forecast)

43.00

─

47.00

90.00

(Note) 1 Revision from the most recent announcement of cash dividends forecasts:

Yes

2 FY2021 end-of-year dividend (forecast) breakdown:

Standard dividend: 43.00 yen

Commemorative dividend: 4.00 yen

3. Consolidated Forecasts for FY2021 (April 1, 2020 - March 31, 2021)

(%: year-on-year change)

	Revenue	Operating	Income before	Net income	Income attributable to	Basic earnings
	income		tax		owners of parent	per share
	Million yen	%	Million yen		%	Million yen		%	Million yen	%	Million yen	%	Yen
First half of	152,000	-20.7	8,300		-53.3	9,300		-51.2	6,700	-52.8	3,100	-72.1	45.59
FY2021
FY2021	350,000	-2.7	26,000		-1.2	28,100		-2.3	20,000	-1.0	13,400	-11.0	197.07

(Note) Revision from the most recent announcement of consolidated financial forecasts: Yes

*Notes

(1) Changes in important subsidiaries during the quarter		: None
(Changes in significant subsidiaries affecting the scope of consolidation during this period)
New subsidiaries	― companies	Excluded subsidiaries	― companies
(2) Changes in accounting policies and accounting estimates
1)	Changes in accounting policies required by IFRS		: None
2)	Changes other than 1)		: None
3)	Changes in accounting estimates		: None

(3) Number of shares issued (common stock)

1. Number of shares issued at the end of the term including treasury stock
2. Number of treasury stock at the end of the term
3. Average number of shares during the term (cumulative)

1Q of FY2021	68,000,000	FY2020	68,000,000
shares	shares
1Q of FY2021	2,434	FY2020	2,434
shares	shares
1Q of FY2021	67,997,566	1Q of FY2020	67,997,697
shares	shares

*This quarterly financial statement is exempt from quarterly reviews.

*Explanation regarding the appropriate use of forecasts of financial results and other notes

The consolidated forecasts presented on the previous page are projections made by management at TS TECH Co., Ltd. (hereinafter the "Company") on the basis of information available at the time of preparation. For that reason, they involve risks and uncertainties. Accordingly, we request that readers of this document avoid making investment decisions based exclusively on these forecasts. Please bear in mind the possibility that actual results may differ materially from these forecasts due to various important factors. Readers are asked to proceed to "(3) Qualitative Information Concerning Consolidated Forecasts" on page 4 for assumptions and other information that form the premise for the operating results forecast on the previous page.

Materials to be used during the results briefing scheduled for August 4, 2020 are available via the following link on our website (https://www.tstech.co.jp/english/).

(IR Information) https://www.tstech.co.jp/english/ir

○Table of Contents
1. Qualitative Information Concerning Quarterly Results ....................................................................................	2
(1)	Qualitative Information Concerning Consolidated Financial Results..........................................................	2
(2)	Qualitative Information Concerning Consolidated Financial Positions .......................................................	4
(3)	Qualitative Information Concerning Consolidated Forecasts ....................................................................	4
2. Condensed Quarterly Consolidated Financial Statements and Significant Notes Thereto ................................	5
(1)	Condensed Quarterly Consolidated Statement of Financial Position ........................................................	5
(2)	Condensed Quarterly Consolidated Statements of Income and Comprehensive Income ............................	7
(3)	Condensed Quarterly Consolidated Statement of Changes in Equity ..........................................................	9
(4)	Condensed Quarterly Consolidated Statement of Cash Flows...................................................................	11
(5)	Notes Concerning Condensed Quarterly Consolidated Financial Statements ...........................................	13

- 1 -

Difference

-33,971

-6,438

First quarter of

FY2020

50,634

4,043

First quarter of

FY2021

16,662

(2,394)

(Unit: Million yen)

Change

-67.1%

─%

First quarter of

FY2020

19,971

1,794

Difference

-6,345

-2,256

First quarter of

FY2021

13,625

(462)

(Unit: Million yen)

Change

-31.8%

─%

1. Qualitative Information Concerning Quarterly Results

1. Qualitative Information Concerning Consolidated Financial Results

Revenue for the first quarter of FY2021 (April 1, 2020 - June 30, 2020) reached 54,739 million yen on a consolidated basis, a decrease of 45,982 million yen (45.7%) from the same period in FY2020, due to the impact of the COVID-19 pandemic. Production stoppages in the Americas and Asia and Europe segments and lower production volume in the Japan segment caused by the pandemic offset increased production in the China

segment. All plants have since resumed operations.

Looking at profits, operating loss stood at 1,792 million yen, a decrease of 12,167 million yen (─%) year on year due to the impact of lower revenue, offsetting various cost containment measures. Loss attributable to

owners of parent amounted to 3,757 million yen, a decrease of 10,140 million yen (─%) year on year.

*USD/JPY	average	1Q	exchange	rate…	FY2020:	¥109.9	FY2021:	¥107.6
*CNY/JPY	average	1Q	exchange	rate…	FY2020:	¥16.1	FY2021:	¥15.2

Operating performance by segment is as follows.

(Japan)

Revenue

Operating income/loss

Main factors for year-on-year change

Revenue	Revenue decreased primarily due lower production volume stemming from the
COVID-19 pandemic and a decrease in royalty revenue from overseas subsidiaries.
Operating income	Operating income decreased primarily due to the impact of lower revenue, offsetting
cost containment measures.
*While production did not stop due to the COVID-19 pandemic, select locations made adjustments to
production volume.
(Americas)

Revenue

Operating income/loss

Main factors for year-on-year change

Revenue	Revenue decreased primarily due to lower production volume stemming from the
COVID-19 pandemic.
Operating income	Operating income decreased primarily due to the impact of lower revenue, offsetting
cost containment measures.
*Production stoppages caused by the COVID-19 pandemic began in late March, but production largely
resumed by mid-May.

- 2 -

Revenue Operating income

(China)
				(Unit: Million yen)
	First quarter of	First quarter of	Difference	Change
	FY2020	FY2021
Revenue	22,914	25,418	2,503	10.9%
Operating income	4,704	5,423	718	15.3%
Main factors for year-on-year change

Revenue	Revenue increased on higher production volume and an improved model mix,
offsetting the impact of foreign currency translation.
Operating income	Operating income increased primarily due to the impact of higher revenue and cost-
cutting measures.

*Production stoppages caused by the COVID-19 pandemic began in early February, but all locations resumed production by early March. There were no production stoppages during the period under review.

(Asia and Europe)
					(Unit: Million yen)
		First quarter of	First quarter of	Difference	Change
		FY2020	FY2021
	Revenue	13,510	3,196	-10,314	-76.3%
	Operating income/loss	931	(2,921)	-3,852	─%

Main factors for year-on-year change

Revenue decreased primarily due to lower production stemming from the COVID-19 pandemic.

Despite cost containment efforts, operating income decreased primarily due to the impact of lower revenue and expenses related to the reorganization of automobile seat production in India.

*Production stoppages caused by the COVID-19 pandemic began late March. Segment production resumed in early May, with the timing of the restart of operations varying by country.

Sales by business segment are as follows:

						(Unit: Million yen)
		First quarter of FY2020	First quarter of FY2021	Difference	Change
			Sales ratio		Sales ratio
	Motorcycles	1,116	1.1%	915	1.7%	-200	-17.9%
	Automobiles	98,299	97.6%	53,086	97.0%	-45,213	-46.0%
	（Seats）	86,985	86.4%	47,684	87.1%	-39,300	-45.2%
	（Interior products）	11,314	11.2%	5,401	9.9%	-5,912	-52.3%
	Other businesses	1,306	1.3%	737	1.3%	-568	-43.5%
	Total	100,722	100.0%	54,739	100.0%	-45,982	-45.7%

- 3 -

1. Qualitative Information Concerning Consolidated Financial Positions (Assets)
   Assets at the end of the first quarter of FY2021 stood at 338,527 million yen, a decrease of 3,293 million

yen from the end of FY2020. This change is mainly due to a decrease in cash and cash equivalents stemming from the allocation of net loss and payment of cash dividends. This offset an increase in trade and other receivables primarily on higher order volume from major customers in China.

(Liabilities)

Liabilities at the end of the first quarter of FY2021 amounted to 71,514 million yen, up 4,246 million yen from the end of FY2020. This change resulted mainly from an increase in other current liabilities stemming primarily from the addition of Honda Cars SAITAMAKITA as a subsidiary.

(Equity)

Equity at the end of the first quarter of FY2021 was 267,012 million yen, down 7,539 million yen from the end of FY2020. This change is primarily the result of a decrease in retained earnings stemming from the allocation of net loss.

(3) Qualitative Information Concerning Consolidated Forecasts

Consolidated forecasts for FY2021, which were previously pending as it was not possible to make reasonable calculations due to the impact of the COVID-19 pandemic, have been calculated based upon the information

currently available.
		(Unit: Million yen)
	First half of FY2021 forecasts	Year-on-year change
Revenue	152,000	-20.7%
Operating income	8,300	-53.3%
Income before tax	9,300	-51.2%
Net income	6,700	-52.8%
Income attributable to owners of parent	3,100	-72.1%
	FY2021 forecasts	Year-on-year change
Revenue	350,000	-2.7%
Operating income	26,000	-1.2%
Income before tax	28,100	-2.3%
Net income	20,000	-1.0%
Income attributable to owners of parent	13,400	-11.0%

- 4 -

2. Condensed Quarterly Consolidated Financial Statements and Significant Notes Thereto

1. Condensed Quarterly Consolidated Statement of Financial Position

			(Unit: Million yen)
		FY2020	First quarter of FY2021
		(As of March 31, 2020)	(As of June 30, 2020)
Assets
Current assets
Cash and cash equivalents	149,628	129,177
Trade and other receivables	41,500	53,964
Other financial assets	11,540	8,361
Inventories	28,233	30,637
Income tax receivables	2,281	2,999
Other current assets	4,667	4,624
Total assets	237,852	229,765
Non-current assets
Property, plant and equipment	68,530	69,089
Intangible assets	9,366	10,685
Investments accounted for using the equity method	1,596	1,183
Other financial assets	20,307	23,403
Net defined benefit asset	1,879	1,868
Deferred tax assets	1,055	1,063
Other non-current assets	1,231	1,466
Total non-current assets	103,967	108,761
Total assets	341,820	338,527

- 5 -

			(Unit: Million yen)
		FY2020	First quarter of FY2021
		(As of March 31, 2020)	(As of June 30, 2020)
Liabilities and equity
Current liabilities
Trade and other payables	51,084	50,296
Current borrowings	75	75
Other financial liabilities	1,109	1,122
Income taxes payable	575	1,796
Provisions	156	129
Other current liabilities	2,965	6,245
Total current liabilities	55,965	59,665
Non-current liabilities
Other financial liabilities	2,841	3,532
Net defined benefit liability	1,372	1,473
Provisions	2,378	2,364
Deferred tax liabilities	3,598	3,441
Other non-current liabilities	1,111	1,036
Total non-current liabilities	11,302	11,849
Total liabilities	67,268	71,514
Equity
Capital stock	4,700	4,700
Capital surplus	5,171	5,171
Treasury stock	(5)	(5)
Retained earnings	249,367	242,686
Other components of equity	(4,487)	(3,039)
Total equity attributable to owners of parent	254,745	249,511
Non-controlling interests	19,806	17,500
Total equity	274,552	267,012
Total liabilities and equity	341,820	338,527

- 6 -

1. Condensed Quarterly Consolidated Statements of Income and Comprehensive Income Condensed Quarterly Consolidated Statement of Income
   Consolidated First Quarter

		(Unit: Million yen)
	First quarter of FY2020	First quarter of FY2021
	(April 1, 2019 -	(April 1, 2020 -
	June 30, 2019)	June 30, 2020)
Revenue	100,722	54,739
Cost of sales	(81,755)	(50,015)
Gross profit	18,966	4,724
Selling, general and administrative expenses	(8,601)	(7,253)
Other income	384	1,121
Other expenses	(374)	(385)
Operating profit (loss)	10,374	(1,792)
Finance income	606	521
Finance costs	(147)	(25)
Share of profit (loss) of investments accounted	108	75
for using the equity method
Income (loss) before tax	10,942	(1,221)
Income tax expense	(2,909)	(735)
Net income (loss)	8,032	(1,956)
Income (loss) attributable to
Owners of parent	6,383	(3,757)
Non-controlling interests	1,649	1,801
Net income (loss)	8,032	(1,956)
Earnings (losses) per share
Basic earnings (losses) per share (yen)	93.87	(55.26)
Diluted earnings per share (yen)	─	─

- 7 -

Condensed Quarterly Consolidated Statement of Comprehensive Income

Consolidated Cumulative First Quarter

		(Unit: Million yen)
	First quarter of FY2020	First quarter of FY2021
	(April 1, 2019 -	(April 1, 2020 -
	June 30, 2019)	June 30, 2020)
Net income (loss)	8,032	(1,956)

Other comprehensive income

Components that will not be reclassified subsequently to net profit or loss

Remeasurements of defined benefits plans

Financial assets measured at fair value through other comprehensive income

2	(52)
(793)	1,073

Total components that will not be reclassified subsequently to net profit or loss

Components that may be reclassified subsequently to net profit or loss

Differences on translation from foreign operations

Share of other comprehensive income of associates accounted for using the equity method

(790)	1,020

(4,594)	505
28	(50)

Total components that may be reclassified subsequently to net profit or loss

Other comprehensive income, net or tax

Comprehensive income for the period

Comprehensive income for the period attributable to:

(4,566)	455
(5,356)	1,476
2,676	(480)

Owners of parent	1,780	(2,310)
Non-controlling interests	895	1,829
Comprehensive income for the period	2,676	(480)

- 8 -

1. Condensed Quarterly Consolidated Statement of Changes in Equity First quarter of FY2020 (April 1, 2019 - June 30, 2019)

					(Unit: Million yen)
		Equity attributable to owners of parent
	Capital stock	Capital surplus	Treasury stock	Retained earnings	Other components
					of equity
Balance as at the end of	4,700	5,171	(5)	240,038	5,712
the previous fiscal year
Cumulative effect of				44
accounting policy change
Balance as at the end of the
previous fiscal year reflective of	4,700	5,171	(5)	240,083	5,712
accounting policy change
Comprehensive income
Net income (loss)				6,383
Other comprehensive income					(4,602)
Total comprehensive income	─	─	─	6,383	(4,602)
Transactions with owners, etc.
Dividends				(2,855)
Acquisition of treasury stock			(0)
Total transactions with	─	─	(0)	(2,855)	─
owners, etc.
Balance as at	4,700	5,171	(5)	243,610	1,110
the end of the fiscal year
	Total equity	Non-controlling
	attributable to	Total equity
	interests
	owners of parent
Balance as at the end of	255,617	21,807	277,424
the previous fiscal year
Cumulative effect of	44		44
accounting policy change
Balance as at the end of the
previous fiscal year reflective of	255,662	21,807	277,469
accounting policy change
Comprehensive income
Net income (loss)	6,383	1,649	8,032
Other comprehensive income	(4,602)	(754)	(5,356)
Total comprehensive income	1,780	895	2,676
Transactions with owners, etc.
Dividends	(2,855)	(5,435)	(8,291)
Acquisition of treasury stock	(0)		(0)
Total transactions with	(2,856)	(5,435)	(8,292)
owners, etc.
Balance as at	254,587	17,266	271,853
the end of the fiscal year

- 9 -

First quarter of FY2021 (April 1, 2020 - June 30, 2020)

					(Unit: Million yen)
		Equity attributable to owners of parent
	Capital stock	Capital surplus	Treasury stock	Retained earnings	Other components
					of equity
Balance as at the end of	4,700	5,171	(5)	249,367	(4,487)
the previous fiscal year
Cumulative effect of
accounting policy change
Balance as at the end of the
previous fiscal year reflective of	4,700	5,171	(5)	249,367	(4,487)
accounting policy change
Comprehensive income
Net income (loss)				(3,757)
Other comprehensive income					1,447
Total comprehensive income	─	─	─	(3,757)	1,447
Transactions with owners, etc.
Dividends				(2,923)
Acquisition of treasury stock
Total transactions with	─	─	─	(2,923)	─
owners, etc.
Balance as at	4,700	5,171	(5)	242,686	(3,039)
the end of the fiscal year
	Total equity	Non-controlling
	attributable to	Total equity
	interests
	owners of parent
Balance as at the end of	254,745	19,806	274,552
the previous fiscal year
Cumulative effect of
accounting policy change
Balance as at the end of the
previous fiscal year reflective of	254,745	19,806	274,552
accounting policy change
Comprehensive income
Net income (loss)	(3,757)	1,801	(1,956)
Other comprehensive income	1,447	28	1,476
Total comprehensive income	(2,310)	1,829	(480)
Transactions with owners, etc.
Dividends	(2,923)	(4,135)	(7,059)
Acquisition of treasury stock	─		─
Total transactions with	(2,923)	(4,135)	(7,059)
owners, etc.
Balance as at	249,511	17,500	267,012
the end of the fiscal year

- 10 -

(4) Condensed Quarterly Consolidated Statement of Cash Flows

			(Unit: Million yen)
		First quarter of FY2020	First quarter of FY2021
		(April 1, 2019 -	(April 1, 2020 -
		June 30, 2019)	June 30, 2020)
Cash flows from operating activities
Income (loss) before tax	10,942	(1,221)
Depreciation and amortization	3,084	3,001
Impairment loss	─	90
Loss (gain) on disposal of non-current assets	111	146
Finance income and finance costs	(582)	(413)
Share of loss (profit) of investments accounted	(108)	(75)
for using the equity method
Decrease (increase) in trade and other receivables	732	(12,177)
Net decrease (increase) in leased receivables	496	383
and investment assets
Decrease (increase) in inventories	40	(1,518)
Increase (decrease) in trade and other payables	2,658	(1,691)
Increase (decrease) in net defined benefit asset	63	55
or liability
Increase (decrease) in provisions	(78)	(39)
Other	(1,969)	741
Subtotal	15,391	(12,717)
Interest income received	379	345
Dividend income received	206	168
Interest expenses paid	(40)	(25)
Income taxes paid	(2,556)	(1,080)
Cash flows from operating activities	13,379	(13,309)
Cash flows from investing activities
Payments into time deposits	(1,753)	(1,482)
Proceeds from withdrawal of time deposits	781	2,553
Purchase of property, plant and equipment	(1,763)	(998)
Proceeds from sales of property, plant and	26	98
equipment
Purchase of intangible assets	(706)	(453)
Purchase of equity instruments	(13)	(14)
Proceeds from sales of equity instruments	0	─
Payments of loans receivable	(27)	(16)
Collection of loans receivable	60	62
Purchase of shares of consolidated subsidiaries	─	(1,564)
Other	7	6
Cash flows from investing activities	(3,389)	(1,809)

- 11 -

			(Unit: Million yen)
		First quarter of FY2020	First quarter of FY2021
		(April 1, 2019 -	(April 1, 2020-
		June 30, 2019)	June 30, 2020)
Cash flows from financial activities
Net increase (decrease) in short-term loans	0	─
payable
Repayments of lease liabilities	(347)	(529)
Purchase of treasury stock	(0)	─
Cash dividends paid	(2,855)	(2,923)
Payment to acquire interests in subsidiaries	(2,717)	(2,067)
from non-controlling interests
Net cash provided by (used in) financing	(5,921)	(5,520)
activities
Effect of exchange rate change on cash and cash	(2,828)	188
equivalents
Net increase (decrease) in cash and cash	1,240	(20,450)
equivalents
Cash and cash equivalents at beginning of period	128,647	149,628
Cash and cash equivalents at end of period	129,888	129,177

- 12 -

(5) Notes Concerning Condensed Quarterly Consolidated Financial Statements

(Notes Concerning Going Concern Assumption) Not applicable

(Segment Information, etc.)

Information about revenue, profits or losses for reportable segments

First quarter of

FY2020 (April 1, 2019

- June

30,

2019)

(Unit: Million yen)

Reportable

segments

Amounts stated

Adjustments

in

consolidated

Japan

Americas

China

Asia and

Total

F/S

Europe

Revenue

External

revenue

15,801

50,266

21,621

13,032

100,722

─

100,722

Inter-segment transfer

4,170

368

1,292

477

6,308

(6,308)

─

Total

19,971

50,634

22,914

13,510

107,031

(6,308)

100,722

Segment profits

1,794

4,043

4,704

931

11,473

(1,098)

10,374

Finance income and

─

─

─

─

─

─

458

finance

costs

Return

on

investment

─

─

─

─

─

─

108

using the

equity method

Income

before tax

─

─

─

─

─

─

10,942

(Notes)

1. Adjustments of -1,098 million yen for segment profits include a deduction of 49 million yen for transactions among

segments,

and operating

expenses of

-1,147

million yen associated with

the administration

division of the

headquarters of the parent company, which could not be allocated.

2. Segment profits are adjusted to operating income in the condensed quarterly consolidated statements of income.

First quarter of FY2021 (April 1, 2020 - June 30, 2020)

(Unit: Million yen)

				Reportable segments			Amounts stated
								Adjustments	in consolidated
			Japan	Americas	China	Asia and	Total
				F/S
			Europe
Revenue
External	revenue	10,854	16,541	24,344	3,000	54,739	─	54,739
Inter-segment transfer	2,771	121	1,073	196	4,163	(4,163)	─
		Total	13,625	16,662	25,418	3,196	58,903	(4,163)	54,739
Segment profits (losses)	(462)	(2,394)	5,423	(2,921)	(356)	(1,436)	(1,792)
Finance income and	─	─	─	─	─	─	495
finance	costs
Return	on	investment	─	─	─	─	─	─	75
using the	equity method
Income	before tax	─	─	─	─	─	─	(1,221)
(Notes)	1. Adjustments of -1,436 million yen for segment profits include a deduction of -177 million yen for transactions
		among segments, and operating expenses of -1,259 million yen associated with the administration division of the
		headquarters of the parent company, which could not be allocated.

2. Segment profits are adjusted to operating income in the condensed quarterly consolidated statements of income.

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