Nitto Kogyo : Presentation Materials with Script（PDF：8.3 MB）

Financial Results Briefing

for the Fiscal Year Ended March 2024

April 1, 2023 - March 31, 2024

（Presentation Materials with Script）

【Event Summary】

Date	：May 30, 2024	13：00～14：00
Venue	：Webcast
Speakers：Toru Kurono	President and COO
	Akitaka Tejima	General Manager of Business Management Division,
		Managing Director
	Koichi Takenaka	General Manager of Group Business Planning
		Administration Division, Director

Some explanations are supplemented and key points are summarized.

Presentation

Moderator: Thank you for your patience. We will now start the financial results briefing for the fiscal year ended March 31, 2024, of NITTO KOGYO CORPORATION.

Let me begin by introducing the attendees from our side. This is Mr. Toru Kurono, President and COO, together with Mr. Akitaka Tejima, Managing Director, and Mr. Koichi Takenaka, Director. Thank you.

The Company will explain the financial results for the fiscal year ended March 31, 2024, based on the presentation materials, and then we will take questions from the audience. The presentation materials and the medium-term management plan are available on the Company's website.

Now, Mr. Kurono, please start with your explanation.

Kurono: Hello, everyone. I am Toru Kurono, President and COO. Thank you very much for taking time out of your busy schedule today to attend NITTO KOGYO CORPORATION's financial results briefing for the fiscal year ended March 31, 2024. We would also like to take this opportunity to thank you all for your continued guidance and encouragement.

Today's presentation will proceed with the financial results presentation materials and the 2026 medium- term management plan posted on the Company's website. I would also like to take this opportunity to announce our new uniforms, which were designed based on employee suggestions. These uniforms are both easy to move in and have an excellent design.

First, please see page one of the presentation material. This is an executive summary.

Consolidated sales for the full year ended March 31, 2024, were the highest ever recorded.

Despite the impact of surging raw materials and components prices, we achieved a significant increase in profit due to price revisions, an increase in marginal profit, and improved transaction prices.

The revised plan announced on February 5, 2024, was achieved in all profit categories.

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Page two, table of contents. Today I will explain items one through four. Please look five at the reference material later.

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Next page, this is a summary of consolidated financial results for the full fiscal year ended March 31, 2024.

Page four shows the full-year consolidated financial accounts highlights.

Sales totaled JPY160.7 billion, up 9.6% from the previous year. This was due to the effect of price revisions, an increase in distribution/panel boards projects, and a recovery in office network and other projects.

Operating income was JPY11.9 billion, up 46.4% YoY. Although there were price hikes in raw materials and components and an increase in SG&A and other expenses, the increase in marginal profit, the effect of price revisions, and improved transaction prices contributed to this result.

Ordinary income was JPY12.5 billion, up 38.8% YoY. Non-operating income, such as dividend income, exceeded operating income.

Current net income attributable to parent company shareholders was JPY8.7 billion, an increase of 59.1% from the previous year.

As a result of the above, we achieved record-high sales for the full-year results, as well as the revised plan announced in February, in all profit categories.

We will explain the situation by segment and division in more detail later in this report.

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Page five, please. This section shows the NITTO KOGYO Group and its business segments.

The electrical and telecommunications infrastructure-related manufacturing, construction, and services business, led by NITTO KOGYO CORPORATION which is shown in orange in the pie chart, is the core business, accounting for 59% of sales and 77% of operating income.

The electric and telecommunication infrastructure-related distribution business, which is shown in light purple in the pie chart, accounts for 32% of net sales and 16% of operating income.

The electronic parts-related manufacturing business, which is shown in light blue in the pie chart, and which is led by Kitagawa Industries, accounts for 9% of net sales and 7% of operating income.

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Page six, please. Full-year segment financial highlights.

Please note that segment names are abbreviated in this slide and beyond.

The manufacturing, construction, and service businesses reported increases in sales and income. Both sales and income increased due to higher sales of mainstay distribution/panel boards and enclosures.

In the distribution business, both sales and income increased due to higher sales of network components in line with a recovery in office network projects, as well as an increase in renewable energy-related and other projects.

In the electronic parts business, sales of thermal management products increased due to strong demand in the automotive-related market. However, overall sales declined due to lower demand in the air conditioner- related and industrial equipment markets, among others. On the other hand, segment income increased due to an improvement in the variable cost ratio and a decrease in SG&A and other expenses.

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Page seven, please. The following is a breakdown of sales for the Group's core businesses, the manufacturing, construction, and services business.

In the distribution boards, sales of high-voltage power receiving equipment and panel boards increased due to firm facilities investment demand.

In the enclosures, sales increased due to an increase in sales of enclosures with drilled holes as a result of expanded use of the online-based design and order system.

The breakers/switches/parts/other division reported an increase in sales, mainly due to higher sales of EV charging stations, which were boosted by government subsidy policies.

In the construction and services division, sales decreased due to a decline in sales of telecommunications work for hospitals, despite an increase in projects for the renewal of telephone facilities for schools and telecommunications facilities for factories.

As a result, the sales plan was achieved with the exception of the enclosure division.

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Please see page eight. The factors in changes in consolidated operating income for the full year compared to the previous year.

It was JPY8.1 billion in the previous fiscal year and JPY11.9 billion in the current fiscal year, an increase of approximately JPY3.8 billion.

On a non-consolidated basis, NITTO KOGYO CORPORATION reported an increase of JPY6.9 billion in income from sales factors, a decrease of JPY1.6 billion in income from variable cost factors, and a decrease of JPY2.7 billion in income from fixed cost factors. In group factors, it includes SunTelephone and Kitagawa Industries, which posted higher income than the previous year, resulting in a JPY1.2 billion increase in income.

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See page nine. Overview of consolidated financial position.

Total assets at the end of the fiscal year ended March 31, 2024, increased by approximately JPY26.1 billion compared to the end of the previous fiscal year. This was mainly due to borrowings related to the Seto Plant and facilities investment.

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Please go to page 10. Consolidated cash flow statement. The left side shows the previous period, and the right side shows the current period.

Cash and cash equivalents at the end of the period increased by approximately JPY5.3 billion from the beginning of the period, mainly due to borrowings and facilities investment related to the Seto Plant.

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