EXEDY : FY2023 Financial Results (192KB)

EXEDY Corporation (7278) FY2023 Financial Results

April 25, 2024

FY2023 Consolidated Financial Results〔IFRS〕

(April 1, 2023 through March 31, 2024)

(English translation extracted from the original Japanese document)

Company Name:	EXEDY Corporation	Listing: Tokyo Stock Exchange
Code No.:	7278	URL:https://www.exedy.com
Representative:	Tetsuya Yoshinaga, Representative Director, President
Contact Person:	Hiroshi Toyohara, Representative Director, Senior Executive Managing Officer,
	Executive General Manager of Administrative Headquarters
Telephone:	[phone]

Scheduled Date for the General Shareholders Meeting: June 24, 2024

Scheduled Date to commence dividend payments: June 25, 2024

Scheduled Filing Date for Annual Securities Report on EDINET: June 24, 2024

Preparation of supplementary material on Yearly Financial Results : Yes

Holding of Yearly financial results briefing: Yes (For Analysts and professional investors)

(Note: All amounts less than one million yen is rounded off)

1. Consolidated Financial Results for the FY2023 (April 1, 2023 to March 31, 2024)

(1) Consolidated Operating Results											(Percentage of change from previous year)
								Profit				Profit Attributable to	Total
	Revenue		Operating Profit		Profit		Comprehensive
			before Tax		Owners of Parent
											Income
	Million	%		Million	%		Million		%	Million		%	Million		%	Million		%
	Yen			Yen		Yen		Yen		Yen		Yen
FY2023	308,338	7.9		(15,438)	-		(13,274)		-	(9,090)		-	(10,023)		-	(158)		-
FY2022	285,639	9.4		8,760	(52.2)		9,916		(49.1)	5,236		(62.1)	4,591		(63.2)	9,643		(58.7)
	Basic Earnings		Diluted Earnings			Ratio of Profit	Ratio of Income			Ratio of
			to Equity Attributable	before Income Taxes			Operating Profit
	per Share			per Share
					to Owners of Parent	to Total Assets			to Revenue
		yen					yen				%			%					%
FY2023		(213.43)					-				(4.5)			(4.1)					(5.0)
FY2022		97.78						-				2.1			3.0					3.1

(Reference) Equity in Earnings of Affiliates is ¥ 50 million for FY2023 and ¥ 57 million for FY2022.

(2) Consolidated Financial Position

			Equity Attributable	Ratio for Equity	Equity per Share
	Total Assets	Total Equity	Attributable	Attributable
	to Owners of Parent
			to Owners of Parent	to Owners of Parent
	millions of yen	millions of yen	millions of yen	%	yen
FY2023	321,935	233,539	218,548	67.9	4,653.32
FY2022	331,875	239,901	225,563	68.0	4,803.89

(3) Consolidated Cash Flows

	Cash Flows	Cash Flows	Cash Flows	Balance of Cash and Cash
	from Operating Activities	from Investing Activities	from Financing Activities	Equivalents at End of Period
	millions of yen	millions of yen	millions of yen	millions of yen
FY2023	37,609	(13,407)	(11,406)	74,043
FY2022	27,224	(12,794)	(11,179)	59,538

2. Dividends

		Annual Dividends per Share						Ratio of Dividend
				Dividends	Payout Ratio		to Equity
	1st	2nd	3rd	Fiscal				Attributable
	Total		(Total)	(Consolidate)
	Quarter	Quarter	Quarter	Year-end					to Owners of
						Parent
	yen	yen	yen	yen	yen		millions of yen	%	%
FY2022	-	45.00	-	45.00	90.00	4,234	92.0	1.9
FY2023	-	60.00	-	60.00	120.00	5,646	-	2.6
FY2024(Forecast)	-	60.00	-	60.00	120.00			56.4

3. FY2024 Consolidated Financial Forecast (April 1, 2024 to March 31, 2025)

(Note: All amounts less than one million yen is rounded off) (Percentage of change from previous year)

	Revenue		Operating Profit	Profit		Profit Attributable to	Basic Earnings
		before Tax		Owners of Parent	Per Share
	millions of yen		%	millions of yen	%	millions of yen		%	millions of yen	%	yen
FY2024	300,000		(2.7)	16,000	-	15,000		-	10,000	-	212.92

Note : This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

EXEDY Corporation (7278) FY2023 Financial Results

• General Notes

1. Changes in important subsidiaries during the period
   (Changes in specified subsidiaries due to changes in the scope of consolidation): Yes

New :1 company (name) Allegis LS 2023-10, a series of CGF2021 LLC, Excluded: - (name) -
(2) Changes in Accounting Policies, Accounting Estimations
① Changes in accounting policies required by IFRS	：None
② Changes in accounting policies except ①		：None
③ Changes in accounting estimates		：None
(Note) For the details, refer to attachment p.12 "3. Consolidated Financial Statements and
Principal Notes (5) Notes on Consolidated Financial Statements"
(3) Number of Outstanding Shares (Ordinary shares)
① Number of shares outstanding at the	FY2023 Q4	48,593,736 shares	FY2022 Q4	48,593,736 shares
end of period (including treasury shares)
②Number of treasury shares at the end	FY2023 Q4	1,627,767 shares	FY2022 Q4	1,639,537 shares
of period
③Average number of ordinary shares	FY2023 Q4	46,961,632 shares	FY2022 Q4	46,945,427 shares
outstanding during the period

(Note) The shares held within the ESOP trust accounts (FY2023 : 81,200 shares, FY2022 : 89,800 shares) are included in the number of Treasury Shares at the end of period. Furthermore, the shares held within the ESOP trust accounts are included in Treasury Shares that are deducted in the calculation of the average number of shares for the period. (FY2023 : 84,654 shares, FY2022 : 93,708 shares)

• This Financial Results are not subject to audit by certified accountants or audit corporations.
• Regarding the appropriate use of Financial forecasts and other information

The above forecast is based on the information available, or the assumptions which the company thinks reasonable as of the release of this report. Actual results might be different from the above estimates due to subsequent changes in circumstances. Regarding to notes of usage and performance forecast assumptions, please refer to attachment p.4, 1. Overview of Operating Results etc. (4) Forward-Looking Information.

EXEDY Corporation (7278) FY2023 Financial Results

Table of Contents of Attachments

1. Overview of Operating Results etc. ……………………………………………………………………………………	2
(1)	Overview of Operating Results for Current Period……………...………………………………………………	2
(2)	Overview of Financial Position for Current Period...……………………………………………………………	3
(3)	Overview of Cash Flow for the Current Period………………………………………………………………….	3
(4)	Forward-Looking Information………………………………………………………………………………………	4
2. Basic Way of Thinking Regarding to Selection of Accounting Standard…………………………………………….	4
3. Consolidated Financial Statements and Principal Notes……………………………………………………………...	5
(1)	Consolidated Statement of Financial Position……………………………………………………………………	5
(2)	Consolidated Statement of Income/Consolidated Statement of Comprehensive Income …………………	7
(3)	Consolidated Statement of Changes in Equity……………………………………………………………….…	9
(4)	Consolidated Statement of Cash Flow…………………………………………………………………………	11
(5)	Notes on Consolidated Financial Statements……………………………………………………………………	12
(Notes for Going Concern) …………………………………………………………………….………………….………	12
(Change of Accounting Policy) ……………………………………………………………………………………………	12
(Segment Information) …………………………………………………………………………………………….………	12
(Per Share Information) ……………………………………………………………………………………………………	13
(Significant Subsequent Events) ………………………………………………………………………………………….	13

1

EXEDY Corporation (7278) FY2023 Financial Results

1. Overview of Operating Results etc.

1. Overview of Operating Results for Current Period
   In the current consolidated cumulative period, the revenue increased due to passing on raw material price increase to the selling price, and the impact of foreign exchange conversion due to depreciation of the yen. In terms of profits, despite increase in revenue, the profitability of the AT (Automatic Automotive Drivetrain related business) segment production facilities is expected to decline due to a significant change in the business environment, namely a decrease in demand resulting from the shift to EVs, and we have identified indication of impairment and tested for impairment on the subject assets. As a result, the book value of the subject assets was reduced to the recoverable value, and we recognized an impairment loss of ¥ 32.2 billion as "Other expenses".

The results for the current consolidated fiscal year were, Revenue ¥ 308.3 Billion (increased by 7.9% from the previous fiscal year), Operating Loss ¥ 15.4 billion (¥ 8.8 billion Operating profit in the previous fiscal year), Loss before tax ¥ 13.3 billion (¥ 9.9 billion Profit before tax in the previous fiscal year), Loss attributable to owners of the parent company was ¥ 10.0 billion (¥ 4.6 billion profit attributable to owners of the parent company in the previous fiscal year).

The summary by type of reportable segment is as follows.

[MT (Manual Automotive Drivetrain related business)]

Revenue was ¥71.6 billion (increased by 0.2% from the previous fiscal year). Segment profit was ¥9.5 billion (increased by 10.4% from the previous fiscal year) due to passing on higher costs caused by high inflation to the selling price etc.

[AT (Automatic Automotive Drivetrain related business)]

Revenue was ¥201.7 billion (increased by 11.1% from the previous fiscal year). This was due to passing on raw material price increase to the selling price, and the impact of foreign exchange conversion due to depreciation of the yen. Despite sales increase the segment loss was ¥25.9 billion (¥ 1.1 billion Segment loss in the previous fiscal year) due to impairment loss. The profitability of the AT segment production facilities is expected to decline due to a significant change in the business environment, namely a decrease in demand resulting from the shift to EVs, and we have identified indication of impairment and tested for impairment on the subject assets. As a result, the book value of the subject assets was reduced to the recoverable value, and we recognized an impairment loss of ¥ 32.2 billion as "Other expenses".

[TS (Industrial machine Drivetrain operations)]

Revenue was ¥15.0 billion (increased by 6.7% from the previous fiscal year). Segment profit was ¥2.1 billion (increased by 32.2% from the previous fiscal year), due to increase in sales and cost reduction efforts.

[Others]

Revenue was ¥20.0 billion (increased by 7.8% from the previous fiscal year). Segment profit was ¥0.8 billion (increased by 1.5% from the previous fiscal year) due to increase in sales of motorcycle clutches in the ASEAN region and cost reduction efforts.

The summary by location is as follows.

[Japan]

Revenue was ¥125.6 billion (increased by 2.5% from the previous fiscal year). Operating loss was ¥6.4 billion (¥ 7.0 billion profit in the previous fiscal year) due to recognition of impairment loss on the company.

[Americas]

Revenue was ¥59.3 billion (increased by 17.4% from the previous fiscal year). Despite revenue increased by the impact of exchange conversion due to depreciation of the yen, the operating loss was ¥4.2 billion (¥4.6 billion operating loss in the previous year) due to higher costs caused by productivity decline and high inflation etc.

2

EXEDY Corporation (7278) FY2023 Financial Results

[Asia and Oceania]

Revenue was ¥112.2 billion (increased by 8.2% from the previous fiscal year). Operating loss was ¥5.3 billion (¥ 6.9 billion profit in the previous fiscal year) due to recognition of impairment loss on Chinese subsidiary of the company.

[Others]

Revenue was ¥11.3 billion (increased by 25.6% from the previous fiscal year). Operating profit was ¥0.5 billion (increased by 89.4% from the previous fiscal year) due to increase in sales etc.

1. Overview of Financial Position for Current Period.
2. 
   In terms of the assets at the end of this consolidated accounting period, the total assets were ¥321.9 billion (¥331.9 billion at the end of the previous consolidated fiscal year), it decreased by ¥9.9 billion (3.0%) from the end of the previous fiscal year. The main contents are ¥36.8 billion decrease in Tangible fixed assets and ¥10.2 billion increased in Deferred tax assets due to recognition of impairment loss, ¥14.5 billion increased in Cash and cash equivalents, ¥3.0 billion increased in Investments in Equity Instruments.
   Total liabilities were ¥88.4 billion (¥92.0 billion at the end of the previous consolidated fiscal year), it decreased by ¥3.6 billion (3.9%) from the end of the previous fiscal year. The main contents are ¥3.7 billion decrease in corporate Bonds and borrowings due to to repayment of borrowings, ¥0.6 billion decrease in Trade and other payables and ¥1.1 billion increased in Income taxes payable.
   Total equity was ¥233.5 billion (¥239.9 billion in the previous consolidated fiscal year), it decreased by ¥6.4 billion (2.7%) from the end of the previous fiscal year. The main contents are ¥14.7 billion decreased in Retained earnings (¥10.0 billion decreased due to loss attributable to owners of the parent company, and ¥4.9 billion decrease due to Appropriation of surplus (dividend)), ¥7.6 billion increased in Other components of equity due to increase in the conversion difference of foreign operation due to depreciation of the yen and ¥0.7 billion increase in Non-controlling interests. The ownership equity ratio attributable to owners of the parent company was 67.9% (68.0% at the end of the previous consolidated fiscal year).
3. Overview of Cash Flow for the Current Period
4. • 
     Funds earned from cash flows from operating activities in the current consolidated fiscal year was ¥ 37.6 billion which increased by ¥ 10.4 billion (38.1%) from the same period of the previous year (¥ 27.2 billion). This is because Income before Income Taxes decreased by ¥ 23.2 billion, the changes in Trade and other payables decreased by
   • 3.0 billion, however, the impairment loss increased by ¥ 28.0 billion, the changes in inventories increased by
   • 3.9 billion, changes in income tax paid increased by ¥ 3.1 billion, and the changes in Trade and other receivables increased by ¥ 1.9 billion.

Funds used for cash flows from investing activities was ¥ 13.4 billion which increased by ¥ 0.6 billion (4.8%) from the same period of the previous year (¥ 12.8 billion). This was due to the increase of ¥ 2.9 billion in Purchase of investment securities, the decrease of ¥ 0.9 billion in Proceeds from sale of investment securities, and the decrease of ¥ 3.1 billion in expenditures for the acquisition of tangible fixed assets.

Funds used for cash flows from financing activities was ¥ 11.4 billion which increased by ¥ 0.2 billion (2.0%) from the same period of the previous year (¥ 11.2 billion). This was due to the increase in expenditure of ¥ 0.5 billion due to the dividend payment.

In addition to the above, there was the increase of ¥ 1.7 billion (¥ 0.9 billion increase in the same period of the previous year) due to the conversion difference for cash and cash equivalents, as the results the balance of cash and cash equivalents in the current consolidated fiscal year was ¥ 74.0 billion which increased by ¥ 14.5 billion (24.4%) from ¥ 59.5 billion at the end of the previous consolidated fiscal year.

3

EXEDY Corporation (7278) FY2023 Financial Results

1. Forward-LookingInformation
   Regarding the forward-Looking information, the outlook remains uncertain due to rising geopolitical risks and high inflation rates.
   We expect consolidated revenue for the fiscal year ending March 31, 2025 to be slightly below the previous year's level, as we anticipate a decrease in sales in AT (Automatic Automotive Drivetrain related business) due to the progress of electrification, while orders mainly in MT (Manual Automotive Drivetrain related business) are expected to remain firm.
   In terms of profits, we will strive to secure profits by improving overall management efficiency, such as improving capacity utilization rates and reducing overhead costs, along with reducing amortization costs associated with impairment losses for the fiscal year ending March 31, 2024, and passing on higher parts, raw material, and energy cost to selling prices.
   As a result, we expect the revenue for the fiscal year ended March 2025 will be ¥300.0 billion (2.7% decrease from this fiscal year), operating income will be ¥16.0 billion (¥ 15.4 billion Operating loss in this fiscal year), and income before income taxes will be ¥15.0 billion (¥ 13.3 billion Loss before income taxes in this fiscal year). Profit attributable to owners of the parent company is expected to be ¥10.0 billion (¥ 10.0 billion Loss attributable to owners of the parent company in this fiscal year).
   The exchange rate is assumed to be ¥148 yen per US dollar.

2. Basic Way of Thinking Regarding to Selection of Accounting Standard

The Group applies IFRS for the purpose of improving the international comparability of financial information in capital markets.

4

EXEDY Corporation (7278) FY2023 Financial Results

3. Consolidated Financial Statements and Principal Notes

1. Consolidated Statement of Financial Position

		As of March 31, 2023			As of March 31, 2024
		Millions of yen	Millions of yen
Assets
Current assets
Cash and cash equivalents	59,538	74,043
Trade and other receivables	53,929	53,513
Other financial assets	2,155	2,105
Inventories	44,198	44,278
Other current assets	3,634	2,949
Total current assets
163,454	176,889
Non-current assets
Property, plant and equipment	154,632	117,824
Goodwill and intangible assets	2,939	2,412
Investments accounted for using equity method	272	1,043
Investments in Equity Instruments	1,810	4,767
Other financial assets	96	80
Deferred tax assets	6,366	16,592
Retirement benefit asset	1,206	1,418
Other non-current assets	1,100	909
Total non-current assets
168,421	145,047
Total assets
331,875	321,935

5

		EXEDY Corporation (7278) FY2023 Financial Results
		As of March 31, 2023			As of March 31, 2024
		Millions of yen	Millions of yen
Liabilities and equity
Liabilities
Current liabilities
Bonds and borrowings	8,228	6,348
Trade and other payables	37,789	37,149
Other financial liabilities	545	664
Income taxes payable	1,664	2,739
Employee benefits accruals	2,336	2,591
Provisions	2,186	2,061
Other current liabilities	3,379	3,121
Total current liabilities
56,127	54,674
Non-current liabilities
Bonds and borrowings	25,423	23,630
Other financial liabilities	1,076	943
Retirement benefit liability	6,609	6,566
Deferred tax liabilities	697	30
Other non-current liabilities	2,042	2,552
Total non-current liabilities
35,848	33,723
Total liabilities
91,975	88,396
Equity
Share capital	8,284	8,284
Capital surplus	7,541	7,543
Treasury shares	(3,709)	(3,682)
Other components of equity	10,639	18,274
Retained earnings	202,808	188,129
Total equity attributable to owners of parent
225,563	218,548
Non-controlling interests	14,338	14,991
Total equity
239,901	233,539
Total liabilities and equity
331,875	321,935

6

EXEDY Corporation (7278) FY2023 Financial Results

1. Consolidated Statement of Income and Consolidated Statement of Comprehensive Income (Consolidated Statement of Income)

	FY2022		FY2023
	(April 1, 2022 through		(April 1, 2023 through
	March 31, 2023)		March 31, 2024)
	Millions of yen		Millions of yen
Revenue	285,639	308,338
Cost of sales	240,872	254,489
Gross profit
44,767	53,850
Selling, general and administrative expenses	32,895	37,425
Other income	2,431	1,326
Other expenses	5,544	33,189
Operating profit (loss)
8,760	(15,438)
Finance income	2,149	3,277
Finance costs	1,051	1,162
Share of profit of investments accounted for using	57	50
equity method
Profit (loss) before tax
9,916	(13,274)
Income tax expense	4,680	(4,184)
Profit (loss)
5,236	(9,090)
Profit (loss) attributable to
Owners of parent	4,591	(10,023)
Non-controlling interests	646	933
Profit (loss)
5,236	(9,090)
Earnings (loss) per share
Basic and diluted earnings (loss) per share	97.78	(213.43)

7

EXEDY Corporation (7278) FY2023 Financial Results

(Consolidated Statement of Comprehensive Income)

			FY2022			FY2023
			(April 1, 2022 through			(April 1, 2023 through
			March, 2023)			March 31, 2024)
			Millions of yen			Millions of yen
Profit (loss)			5,236	(9,090)
Other comprehensive income
Items that will not be reclassified to profit or loss
Net change in fair value of equity instruments
designated as measured at fair value through other	(736)	(276)
comprehensive income
Remeasurements of defined benefit plans	187	275
Total of items that will not be reclassified to profit or
(549)	(1)
loss
Items that may be reclassified to profit or loss
Exchange	differences on translation of foreign	4,952	8,923
operations
Share of	other comprehensive income of	4	9
investments accounted for using equity method
Total of items that may be reclassified to profit or loss
4,956	8,932
Total other comprehensive income
4,406	8,931
Comprehensive income
9,643	(158)
Comprehensive income attributable to
Owners of parent	8,222	(2,113)
Non-controlling interests	1,421	1,954
Comprehensive income
9,643	(158)

8