Marubun : FY2022 3Q Earnings Reports

	Summary of Consolidated Financial Results for the Nine Months Ended December 31, 2022
		January 31, 2023
Company Name :	MARUBUN CORPORATION
Listing :	Tokyo Stock Exchange
Securities Code :	7537
URL :	www.marubun.co.jp
Representative :	Toru Iino, CEO and Representative Director
Contact :	Toshihiro Shibuya, Director, Corporate Planning Dept.
TEL :	[phone]
Preparation of supplementary material :	Yes
Holding of investor meeting :	No

1. Consolidated Financial Results for the Nine Months Ended December 31, 2022 (April 1,2022 - December 31,2022)

(1) Consolidated Operating Results
		Net Sales		Operating Income	Ordinary Income		Profit Attributable
				to Owners of Parent
For the Nine Months ended		Millions of Yen	％	Millions of Yen	％	Millions of Yen	％	Millions of Yen	％
December 31, 2022		163,236	35.0	8,711	117.3	6,377	96.4	3,961	129.4
December 31, 2021		120,873	-	4,008	-	3,246	-	1,726	-

(Note)

Comprehensive income

Nine Months ended December 31, 2022

6,894

Millions of Yen

［202.1%］

Nine Months ended December 31, 2021

2,281

Millions of Yen

［-%］

Earnings per Share

Earnings Per Share

-Basic-

-Diluted-

For the Nine Months ended

Yen

Yen

December 31, 2022

151.57

-

December 31, 2021

66.08

-

(2) Financial Position

Total Assets

Total Net Assets

Equity Ratio

Millions of Yen

Millions of Yen

%

As of December 31, 2022

173,310

53,414

27.2

As of March 31, 2022

148,179

47,574

28.8

(Reference)

Tangible net worth

As of December 31, 2022

47,074

Millions of Yen

As of March 31, 2022

42,711

Millions of Yen

2. Dividends

Dividend Per Share

1st Quarter

2nd Quarter

3rd Quarter

Year-end

Annual

Yen

Yen

Yen

Yen

Yen

Year ended March 31, 2022

-

10.00

-

20.00

30.00

Year ended March 31, 2023

-

20.00

Year ending March 31, 2023

47.00

67.00

(Forecast)

3. Consolidated Financial Forecasts for the Fiscal Year Ending March 31, 2023

Net Sales

Operating Income

Ordinary Income

Profit Attributable

Earnings per Share

to Owners of Parent

-Basic-

Millions of Yen

％

Millions of Yen

％

Millions of Yen

％

Millions of Yen

％

Yen

Year ending March 31, 2023

220,000

31.1

10,000

66.8

7,000

70.5

4,350

78.5

166.44

１. Summary of operating results for the fiscal year under review

During the first nine months of the consolidated fiscal year under review (April 1, 2022 to December 31, 2022), the Japanese economy showed signs of a recovery in consumer spending, capital investment, and employment amid ongoing normalization of economic activities, which was mainly attributable to the mitigation of restrictions on activities, despite the lingering impacts of the COVID-19 pandemic. On the other hand, the future outlook remained uncertain, mainly reflecting the impacts of the protracted Ukraine crisis, the global inflation and interest rate rises, and sharp foreign exchange rate fluctuations.

The electronics sector, in which the Marubun Group (the "Group") operates, the industrial equipment market grew against the backdrop of an increase in capital investment, mainly reflecting the enhancement of semiconductor equipment and digital transformation (DX). The consumer equipment market also remained strong, supported by a recovery in consumer spending. However, the PC market and communication equipment market were stagnant due to the impacts of the plateauing of stay-at-home demand and inventory adjustment. Regarding semiconductors, while tight supply of semiconductors for industrial equipment and vehicles continued, inventory adjustment of some components occurred in a rebound from the continuing inventory accumulation.

In this situation, consolidated net sales of the Group during the first nine months of the fiscal year under review increased 35.0% year on year, to 163,236 million yen, reflecting the increase in demand for medical equipment and laser equipment, in addition to the growth of semiconductors and electronic components for consumer equipment and industrial equipment. On the profit side, operating income increased 117.3% year on year, to 8,711 million yen, reflecting increased sales and a boost in yen-based gross profit in the Electronic Devices Business against the backdrop of the yen's weakness from the beginning of the fiscal year under review. Looking at non-operating profit and loss, while foreign exchange losses of 3,491 million yen were recorded in the first six months of the fiscal year under review due to the yen's weakening in the first half, the Group posted foreign exchange gains of 2,516 million yen in the nine-month period under review, reflecting the occurrence of evaluation gains at the end of the period under review associated with the revaluation of foreign currency-denominated borrowings, which resulted because the exchange rate turned in favor of the yen during the third quarter. This resulted in foreign exchange losses of 975 million yen for the nine months ended December 31, 2022. As a result, ordinary income decreased 96.4% year on year, to 6,377 million yen, and profit attributable to owners of parent increased 129.4% year on year, to 3,961 million yen.

Operating results by business segment are as follows:

Starting from the first quarter of the consolidated fiscal year, the Group changed the classification of reporting segments. With respect to comparisons with results for the same period of the previous year, comparisons and analyses were made based on figures for the nine-month period a year before reclassified into revised segments.

（Electronic Devices Business）

In the Electronic Devices Business, semiconductors and electronic components for industrial equipment and consumer equipment grew significantly, partly reflecting acquisition of new commercial rights. In addition, demand for semiconductors for data centers and vehicles also increased. As a result, net sales increased 43.5% year on year, to 125,611 million yen. Segment profit increased 168.0% year on year, to 7,439 million yen, attributable to an increase in sales and higher gross profit on a yen conversion basis against the backdrop of the depreciation of the yen that had continued since the beginning of the fiscal year.

（Electronic Systems Business）

In the Electronic Systems Business, large-size diagnostic imaging equipment and polymerase chain reaction (PCR) test-related products grew in the medical equipment field. In addition, LED light sources and semiconductor lasers remained strong in the laser equipment field while sales of electronic equipment increased in the field of space and defense electronics. Consequently, net sales stood at 36,111million yen, an increase of 12.2% from the same period of the previous year. Segment profit increased 24.1% year on year, to 1,438 million yen, due to an increase in sales.

（Electronic Solutions Business）

In the Electronic Solutions Business, net sales increased 30.8% year on year, to 1,514 million yen, attributable to an increase in demand for network testing solutions for vehicles and network simulation tools for the communications infrastructure.However, on the segment profit/loss side, a loss of 163 million yen was posted (compared to a segment income of 76 million yen in the same period of the previous fiscal year) as a result of a decline in the gross profit ratio and an increase in selling, general and administrative expenses.

２. Summary of consolidated financial conditions for the fiscal year under review

（Assets）

Current assets at the end of the first nine months of the consolidated fiscal year under review stood at 162,170 million yen, an increase of 24,565 million yen from the end of the previous consolidated fiscal year. This result was mainly attributable to increases in merchandise and finished goods of 18,397 million yen and notes and accounts receivable - trade of 12,631 million yen, which more than offset a decrease of 8,826 million yen in cash and deposits. Non-current assets amounted to 11,140 million yen, an increase of 565 million yen from the end of the previous fiscal year.

As a result, total assets increased by 25,130 million yen from the end of the previous fiscal year to 173,310 million yen.

（Liabilities）

Current liabilities at the end of the first nine months of the consolidated fiscal year under review came to 114,039 million yen, an increase of 19,293 million yen from the end of the previous fiscal year. This is largely due to an increase of 14,407 million yen in short-term borrowings and 3,245 million yen in accounts payable - other. Non-current liabilities amounted to 5,856 million yen, a decrease of 2 million yen from the end of the previous fiscal year.

As a result, total liabilities increased by 19,291 million yen from the end of the previous fiscal year, to 119,895 million yen.

（Net assets）

Net assets totaled 53,414 million yen at the end of the first nine months of the consolidated fiscal year under review, an increase of 5,839 million yen from the end of the previous consolidated fiscal year. This mainly reflected increases of 2,915 million yen in retained earnings, 1,618 million yen in foreign currency translation adjustment, and 1,476 million yen in non-controlling interest.

As a result, the equity ratio stood at 27.2% (compared to 28.8% at the end of the previous fiscal year).

３. Future outlook

In light of recent trends in business performance, the Group made the revisions to the forecast of consolidated financial results for the fiscal year ending March 31, 2023 that it initially announced on October 28, 2022. Net sales for the fiscal year ending March 31, 2023 are forecast to increase 31.1% year on year, to 220,000 million yen while operating income for the fiscal year is expected to rise 66.8% year on year, to 10,000 million yen. Ordinary income for the fiscal year of 7,000 million yen (up 70.5% year on year) and profit attributable to owners of parent of 4,350 million yen (up 78.5% year on year) are forecast, in light of foreign exchange losses and gains during the first nine months of the consolidated fiscal year under review.

For details about the revisions, please refer to the "Notice of Revisions of Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2023 and Dividend Forecast" disclosed today.

		(Millions of yen)
	As of March 31, 2022	As of December 31, 2022
Assets
Current assets
Cash and deposits	25,245	16,418
Notes and accounts receivable - trade	37,996	50,628
Electronically recorded monetary claims -	6,219	10,225
operating
Merchandise and finished goods	30,313	48,711
Work in process	118	283
Accounts receivable - other	35,087	33,267
Other	2,636	2,640
Allowance for doubtful accounts	(12)	(4)
Total current assets	137,604	162,170
Non-current assets
Property, plant and equipment
Buildings and structures	3,651	3,660
Accumulated depreciation	(2,396)	(2,449)
Buildings and structures, net	1,255	1,210
Machinery, equipment and vehicles	10	9
Accumulated depreciation	(10)	(9)
Machinery, equipment and vehicles,	0	0
net
Tools, furniture and fixtures	2,106	2,127
Accumulated depreciation	(1,663)	(1,756)
Tools, furniture and fixtures, net	443	371
Land	1,411	1,411
Leased assets	38	34
Accumulated depreciation	(15)	(15)
Leased assets, net	23	18
Right of use assets	170	228
Accumulated depriciation	(104)	(116)
Right of use assets,net	66	112
Construction in progress	1	0
Total property, plant and equipment	3,201	3,125
Intangible assets	1,039	860
Investments and other assets
Investment securities	2,222	2,221
Deferred tax assets	1,039	1,184
Retirement benefit asset	235	283
Other	2,915	3,543
Allowance for doubtful accounts	(78)	(78)
Total investments and other assets	6,334	7,154
Total non-current assets	10,575	11,140
Total assets	148,179	173,310