Alps Alpine : Consolidated Financial Results

July 28, 2023

Consolidated Financial Results for the Three Months Ended June 30, 2023 [Under Japanese GAAP]

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Scheduled date to file Quarterly Securities Report: Scheduled date to commence dividend payments: Preparation of supplementary materials on quarterly earnings: Holding of quarterly earnings performance review:

ALPS ALPINE CO., LTD.

Prime market of the Tokyo Stock Exchange 6770 https://www.alpsalpine.com/e/ir/index.htmlHideo Izumi

President & CEO, CTO Satoshi Kodaira

Executive Vice President & CFO, Corporate Planning (TEL: [phone])

August 8, 2023

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Yes

Yes (Conference call for analysts and institutional investors)

(Amounts are rounded down to the nearest million yen, unless otherwise noted)

1. Consolidated performance for the three months ended June 30, 2023 (from April 1, 2023 to June 30, 2023)

1. Consolidated operating results

(Percentages indicate changes over the same period of the previous fiscal year)

Net sales

Operating income

Ordinary income

Net income attributable

to owners of parent

Three months ended

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

June 30, 2023

218,508

6.6

(2,539)

―

2,364

(67.5)

(2,374)

―

June 30, 2022

204,978

17.3

1,730

249.6

7,266

―

2,613

―

(Note) Comprehensive income

For the three months ended June 30, 2023:

¥12,918 million

[(34.5%)]

For the three months ended June 30, 2022:

¥19,720 million

[―%]

Basic earnings

Diluted earnings

per share

per share

Three months ended

Yen

Yen

June 30, 2023

(11.55)

―

June 30, 2022

12.67

12.67

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

Net assets per share

As of

Millions of yen

Millions of yen

%

Yen

June 30, 2023

756,831

408,584

53.7

1,979.62

March 31, 2023

736,997

399,782

54.0

1,937.47

(Reference) Equity

As of June 30, 2023:

¥406,793 million

As of March 31, 2023:

¥398,111 million

2. Cash dividends

				Annual dividends
	June 30		September 30	December 31	March 31	Total
Fiscal year ended March 31,	Yen		Yen	Yen	Yen	Yen
―	20.00	―	20.00	40.00
2023
Fiscal year ending March 31,	―
2024
Fiscal year ending March 31,		20.00	―	20.00	40.00
2024 (Forecast)
(Note) Revisions to the cash dividends forecasts most recently announced: None

3. Consolidated earnings forecasts for the fiscal year ending March 31, 2024 (from April 1, 2023 to March 31, 2024)

(Percentages indicate changes over the same period of the previous fiscal year)

	Net sales		Operating income	Ordinary income	Net income attributable Basic earnings
		to owners of parent	per share
	Millions of	%	Millions of	%	Millions of	%	Millions of	%	Yen
Six months ending	yen		yen		yen		yen
469,000	3.2	8,500	(57.3)	9,000	(66.5)	5,000	(71.3)	24.33
September 30,
2023
Fiscal year ending	960,000	2.9	32,500	(3.3)	33,500	(4.1)	20,000	74.4	97.33
March 31, 2024

(Note) Revisions to the consolidated earnings forecasts most recently announced: Yes

• Notes
• 1. Changes in significant subsidiaries during the period (changes in specific subsidiaries resulting in the change in scope of consolidation): None
  2. Application of accounting treatments specific to preparation of quarterly consolidated financial statements: None
  3. Changes in accounting policies, changes in accounting estimates and restatement:
  4. 1. Changes in accounting policies due to revisions to accounting standards: None
     2. Changes in accounting policies due to other reasons: None
     3. Changes in accounting estimates: None
     4. Restatements: None
  5. Number of issued shares (common stock)
  6. 1. Total number of issued shares at the end of the period (including treasury stock)

As of June 30, 2023	219,281,450 shares
As of March 31, 2023	219,281,450 shares

1. Number of shares of treasury stock at the end of the period

As of June 30, 2023

As of March 31, 2023

13,790,540 shares

13,802,000 shares

1. Average number of shares during the period (cumulative from the beginning of the fiscal year)

For the three months ended June 30, 2023

For the three months ended June 30, 2022

205,483,106 shares

206,258,503 shares

• Quarterly earnings reports are not subject to quarterly review by external auditors.
• Explanation and other special notes concerning the appropriate use of earnings forecast (Notes on forward-looking statements)
  The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to ALPS ALPINE CO., LTD. (the "Company") and certain assumptions deemed to be reasonable, and are not intended to guarantee the achievement of these forecasts. Actual results may differ materially from the forecasts due to various factors. Please refer to "1. Qualitative Information on Financial Results for the Three Months Ended June 30, 2023, (3) Information regarding consolidated earnings forecast and other forward-looking statements" on page 3 of the attached materials for the assumptions used in the forecasts and notes regarding the use of the forecasts.

(Access to supplementary material on quarterly earnings)

Supplementary material on quarterly earnings is available on the Company's website on Friday, July 28, 2023.

• Supplementary Materials - Contents

1．Qualitative Information on Financial Results for the Three Months Ended June 30, 2023	2
(1)	Information regarding operating results	2
(2)	Information regarding financial position	3
(3)	Information regarding consolidated earnings forecast and other forward-looking statements	3
2. Quarterly Consolidated Financial Statements and Significant Notes Thereto	4
(1)	Quarterly consolidated balance sheet	4
(2)	Quarterly consolidated statement of income and comprehensive income	6
	For the three months ended June 30, 2023	6
(3)	Notes to quarterly consolidated financial statements	7
	(Notes on going concern assumptions)	7
	(Notes on significant changes in the amount of shareholders' equity)	7
	(Segment information)	7

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1．Qualitative Information on Financial Results for the Three Months Ended June 30, 2023

(1) Information regarding operating results

The global economy for the three months ended June 30, 2023 was characterized by continuous modest recovery due to an easing of supply restrictions in response to supply chain turmoil and the semiconductors shortage. However, the situation remains uncertain, as evidenced by the depreciation of the yen caused by interest rate hikes by central banks around the world to combat inflation progresses.

By region, in the United States and Europe, although private consumption supported the economy, uncertainty around consumer purchasing power is increasing as a result of continuous high inflation and rising interest rates. In China, economic recovery following containment of the COVID-19 pandemic is slowing down and the Chinese government has not yet implemented additional economic stimulus measures. In Japan, despite continued concerns about an economic slowdown resulting from sharply rising energy prices and price hikes, inbound consumption is recovering and the economy is gradually recovering as a result of the normalization of economic activities.

Amidst this business environment, global automotive production is moderately recovering and, in addition, sales and each type of income are rising due to the depreciation of the yen. However, the Company continues to face difficulties brought on by the surge in material prices, strong competition resulting from the commoditization of smartphones, and reduced demand stemming from inventory adjustments related to electronic components for the consumer and automotive markets.

Operating results for the three months ended June 30, 2023 are summarized below. Net sales shown below represent net sales to third parties, after elimination of inter-segment sales.

Segment information

Despite a decline in mobile equipment products, sales increased due to the depreciation of the yen. In addition, there was greater use of products for video game hardware and automotive switches contributing to increased sales for the entire segment. Operating income decreased year-on-year due to the changes in the competitive environment and the composition of products sold for smartphones.

As a result, total net sales in this segment for the three months ended June 30, 2023 increased by 3.5% to ¥61.4 billion, and operating income decreased by 70.6% to ¥1.5 billion, compared to the same period of the previous fiscal year.

Although sales of automotive communication devices and sensors for automobiles were stable, overall segment sales decreased due to a generational change toward the digitalization of keyless entry systems and the end of deliveries of sensors for mobile devices. Operating income was lower than in the same period of the previous year due to an increase in development costs associated with winning orders and sharply rising prices of semiconductors and other materials.

As a result, total net sales in this segment for the three months ended June 30, 2023 decreased by 0.4% to ¥19.8 billion, and operating loss was ¥1.4 billion (net operating income in the same period of the previous year was ¥0.1 billion).

Sales increased due to an increase in demand for automotive components in line with the recovery in global automotive production and the contribution of new infotainment products that began to be sold in the previous fourth quarter. Operating income improved year-on-year due to the promotion of price optimization and the reduction of logistics costs, despite an increase in costs resulting from the launch of production for new product.

As a result, total net sales in this segment for the three months ended June 30, 2023 increased by 30.5% to ¥132.6 billion, compared to the same period of the previous fiscal year and operating loss was ¥2.9 billion (net operating loss in the same period of the previous year was ¥5.9 billion).

On a consolidated basis for the three months ended June 30, 2023, the Group consisting of the three operating segments noted above and others, recorded net sales of ¥218.5 billion (an increase of 6.6% compared to the same period of the previous year), operating loss of ¥2.5 billion (net operating income in the same period of the previous

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year was ¥1.7 billion), ordinary income of ¥2.3 billion (a decrease of 67.5% compared to the same period of the previous year), and net loss attributable to owners of parent of ¥2.3 billion (net income attributable to owners of parent in the same period of the previous year was ¥2.6 billion)

1. Information regarding financial position Assets, Liabilities and Net Assets
   Total assets as of June 30, 2023 increased by ¥19.8 billion to ¥756.8 billion from the end of the previous fiscal year. Equity increased by ¥8.6 billion to ¥406.7 billion, and the equity ratio was 53.7%.
   Current assets as of June 30, 2023 increased by ¥5.7 billion to ¥472.3 billion from the end of the previous fiscal year. The increase in current assets was mainly due to an increase in cash and deposits and inventories, partially offset by a decrease in trade notes and accounts receivable.
   Non-current assets as of June 30, 2023 increased by ¥14.0 billion to ¥284.5 billion from the end of the previous fiscal year. The increase in non-current assets was mainly due to an increase in buildings and structures and investment securities, partially offset by a decrease in construction in progress.
   Current liabilities as of June 30, 2023 increased by ¥7.5 billion to ¥272.0 billion from the end of the previous fiscal year. The increase in current liabilities was mainly due to an increase in short-term borrowings and accrued expenses, partially offset by a decrease in trade notes and accounts payable.
   Non-current liabilities as of June 30, 2023 increased by ¥3.5 billion to ¥76.1 billion from the end of the previous fiscal year. The increase in non-current liabilities was mainly due to an increase in deferred tax liabilities.
2. Information regarding consolidated earnings forecast and other forward-looking statements

Compared to the forecast announced on April 28, 2023 sales for the six months ending September 30, 2023 have been revised upward to take into account exchange rate fluctuations. The earnings forecast for the fiscal year ending March 2024 has been revised upward to reflect changes in sales for the six months ending September 30, 2023. Although there are expectations that earnings will increase due to the depreciation of the yen, the operating income forecast announced on April 28, 2023 has not been changed in consideration of the risk of sluggish consumer market conditions.

The estimated exchange rates in the second quarter are 1 USD=140.00, 1 EUR=150.00, and 1 CNY=19.8.

The earnings forecast includes information that is based on forward-looking statements available at the current point in time.

Actual performance may differ significantly from forecasts due to uncertainties such as fluctuations in exchange rates, change in the demand for smartphone products, prolonged inventory adjustments related to electronic components for the consumer and automotive markets, progress in price optimization in response to sharply rising energy and materials prices, and the risk of cost increases exceeding expectations when mass production of new products begins.

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