東京計器（7721） – [Delayed] Financial Results Briefing for 2Q of the Fiscal Year Ended March 31, 2022 (Fiscal 2021)

Financial Results Briefing for 2Q of the Fiscal Year Ended March 31, 2022 (Fiscal 2021)－From April 1 to September 30, 2021－November 9, 2021The forward-looking statements contained in this material reflect the management’s assumptions based on currently available information as of the date of announcement. Future changes in business environment and other factors may therefore cause differences with the actual situation.©TOKYO KEIKI INC. All Rights Reserved©TOKYO KEIKI INC. All Rights ReservedSummary of Financial Results for 2Q of Fiscal 2021 Summary of 2Q Results Sales were on par with the previous 2Q. Profits were up and returned to the black in 1H. The Hydraulics and Pneumatics Business, which was significantly impacted by COVID-19 in the previous fiscal year, posted higher sales and profits year on year (however, the impacts of soaring raw materials prices resulted in a slower decline in operating loss compared to 1Q). Full-Year Forecast The earnings forecast disclosed on May 14, 2021 remains unchanged, with both revenue and profits expected to increase year on year. The impacts of soaring raw materials prices and delayed delivery of parts due to the semiconductor shortage at present has been reflected in the forecast.©TOKYO KEIKI INC. All Rights Reserved2Table of Contents1. Summary of financial results for 2Q of FY20212. Full-year forecasts of FY2021 3. Topics＜References＞©TOKYO KEIKI INC. All Rights Reserved32Q Financial ResultsFull-year ForecastsTopics2Q Consolidated Net Sales and P/L Net sales were on par with the previous 2Q; P/L turned back to the black amid improvements in all profit indicators. Net sales: The downturn in net sales of the Defense and Communications Equipment Business per the initial forecast was nearly offset by an increase in net sales of the Hydraulics and Pneumatics Business and the Fluid Measurement Equipment Business. P/L: Profits increased on improving cost-of-sales ratio across all segments excluding other businesses.(Million yen)Consolidated net salesConsolidated Operating profitConsolidated Ordinary profitProfit attributable to owners of parent©TOKYO KEIKI INC. All Rights ReservedFiscal 2020 2Q ResultsFiscal 2021 2Q ResultsYear on Year ChangeAmountRate18,49018,380△110△0.6%△446△310△21026235229+472+545+439ーーー42Q Financial ResultsFull-year ForecastsTopics2Q Changes in Consolidated Operating Profit (YoY) Shifted to operating profit from operating loss in previous 2Q. Cost-of-sales ratio improved on the more favorable product mix in the Defense and Communications Equipment Business and higher productivity due to increased production volume in the Hydraulic and Pneumatics Business despite the impacts of soaring raw materials prices on the Hydraulics and Pneumatics Business.(Million yen)Fiscal 2020 2Q Operating profit©TOKYO KEIKI INC. All Rights ReservedFiscal 2021 2Q Operating profit5Operating profit+4722Q Financial ResultsFull-year ForecastsTopics2Q Net Sales and Operating Profit by Segment Marine Systems business: Decreased sales and profits on weaker sales of purchased goods compared to the previous 2Q, despite strong sales of maintenance services related to marine systems. Hydraulics and Pneumatics business: Increased sales and profits on improving demand in all markets compared to Fluid Measurement Equipment business: Strong sales of mainstay ultrasonic flowmeters. Increased sales on delivery of previous 2Q.fire extinguishing systems for major projects. Defense & Communications Equipment business: Shifted to black on rising sales in the private-sector market despite a downturn in sales for public-sector projects due to the off-period that lasted until this fiscal year.Net salesOperating profitFiscal 2020 2Q ResultsFiscal 2021 2Q ResultsYoY ChangeAmountRateFiscal 2020 2Q ResultsFiscal 2021 2Q ResultsYoY ChangeAmountRate4,223△233 △5.2%177△49 △21.8%5,523+723+15.1%△60+274226△3344,4564,8001,1891,451+262+22.1%△176△78+987,0456,000 △1,045 △14.8%△2369+921,0001,182+182+18.2%01+0ー18,49018,380△110 △0.6%△107△31△446△42△40+65△926+472©TOKYO KEIKI INC. All Rights Reserved(Million yen)Marine SystemsHydraulics and Pneumatics Fluid Measurement EquipmentDefense & Communications EquipmentOthersAdjustmentTotalーーーーーー62Q Financial ResultsFull-year ForecastsTopicsStatus of Orders Received and Order Backlog Orders received and order backlog increased in total. Marine Systems business: Demand for new shipbuilding sharply recovered in East Asian markets resulting in an increase Hydraulics and Pneumatics business: Both orders received and order backlog increased on the ongoing recovery in in orders received and order backlog.demand across all markets.planned to be converted to sales in 2H.public-sector market as in the previous 2Q. Fluid Measurement Equipment business: Both orders received and order backlog increased on strong results for projects Defense and Communications Equipment business: Orders received declined because there were no large projects in the Other businesses: The higher order backlog was due to rail inspection cars ordered in 2H of the previous fiscal year in the Railway Maintenance Business (sales to be booked next fiscal year).Amount of orders received for 2Q of FY2021Amount of order backlog at the end of 2Q of FY2021(Million yen)AmountYoY changeAmountChange from the end of FY2020YoY changeMarine SystemsHydraulics and Pneumatics Fluid Measurement EquipmentDefense & Communications EquipmentReported segment totalOthersTotal©TOKYO KEIKI INC. All Rights Reserved4,8696,1442,3013,87717,1911,78518,977+17.8%+31.1%+23.1%△37.1%+2.0%△1.3%+1.7%2,9233,2811,86413,44821,5161,51523,031+28.4%+23.4%+83.7%0.0%+67.8%+2.7%+24.1%+34.8%+13.5%+3.3%+22.3%+4.4%7△13.6%△6.5%2Q Financial ResultsFull-year ForecastsTopicsSupply Chain Situation• The Group’s net sales are weighted toward public-sector products. Parts procurement for these products is carried out systematically from a relatively early stage, which means they are less susceptible to the impacts of difficulty sourcing parts occurring this fiscal year.Features of the Group’s supply chain• Marine Systems business: Room for addressing the impacts of sourcing difficulties because of the relatively long manufacturing lead time, while sales have little in the way of seasonal fluctuations.• Hydraulics and Pneumatics business: Little in the way of seasonal fluctuations in net sales and susceptible to sourcing difficulties and soaring resource prices because of short manufacturing lead time.Difficulty obtaining partsSituation in 2QResponses• Products in Marine Systems and private-• Continued to adjust deliveries with suppliers sector products in Defense & Communications Equipment have seen sourcing difficulties emerge for some electronic parts.• Hydraulics and Pneumatics have seen sourcing difficulties of purchased products overseas despite an easing for some electronic parts.including arranging sourcing in advance.• Secured market inventory by expanding suppliers.• Adjusted delivery timing with customers.*Risks understood as of present have been reflected in the full-year sales forecast. Soaring raw materials prices• Hydraulics and Pneumatics have seen • Continuing with price negotiations with Soaring raw materials pricesworsening materials costs due to soaring prices for metal parts including steel, copper and aluminum.customers*Risks understood as of present have been reflected in the full-year profit/loss forecast.©TOKYO KEIKI INC. All Rights Reserved82Q Financial ResultsFull-year ForecastsTopicsConsolidated Balance Sheets (Main accounting items only) The equity ratio stands at 58.9% as of September 30, 2021, maintaining financial soundness (58.7% on March 31, 2021). Cash and deposits increased by 1,396 million yen as progress was made in the monetization of notes and accounts receivable on deliveries in the previous fiscal year in the Defense & Communications Equipment Business. Inventories increased by 1,917 million yen due to progress in works for next fiscal year and beyond in the Defense & Communications Equipment Business (of which works in progress totaled 1,337 million yen). Declined by 595 million yen compared to previous 2Q.(Liabilities and net assets)As of Mar 31, 2021As of Sep 30, 2021Amount of change(Million yen)As of Mar 31, 2021As of Sep 30, 2021Amount of change40,95011,62040,728△222 Current liabilities17,72217,71913,016+1,396Notes and accounts payable(Assets)(Million yen)Current assetsCash and depositsNotes and accounts receivableElectronically recorded monetary claims12,5689,849△2,719Short-term loans payable3,8162,736△1,080Provision for bonusesInventories12,67314,590+1,917 Non-current liabilitiesAccounts receivableOther32245226316+194Long-term loans payable+71 Total liabilitiesNon-current assets12,59612,61418 Shareholders’ equityTangible assets6,9706,656△314Retained earningsIntangible assets3346+131,8351,979+144Accumulated other comprehensive incomeInvestment securities3,6063,914+308 Total net assetsTotal assets53,54653,341△204 Total liabilities and net assets31,93953,54631,87053,341©TOKYO KEIKI INC. All Rights Reserved5,0938,5161,0973,8842,42421,60729,61923,0765,8628,2801,0803,7522,24621,47129,43822,881△3+768△236△17△132△178△135△182△195△69△2049Table of Contents1. Summary of financial results for 2Q of FY20212. Full-year forecasts of FY2021 3. Topics＜References＞©TOKYO KEIKI INC. All Rights Reserved102Q Financial ResultsFull-year ForecastsTopicsFiscal 2021 Full-year Earnings Forecast There are no changes to the earnings forecast disclosed on May 14, 2021 (forecast for increase in net sales and profits year on year).(Million yen)Consolidated net salesConsolidated Operating profitConsolidated Ordinary profitProfit attributable to owners of parentFiscal 2020 ResultsFiscal 2021 ForecastYoY ChangeAmountPercentage42,08142,900+819+1.9%1,2501,350+100+8.0%1,4581,470+12+0.8%9451,130+185+19.6%©TOKYO KEIKI INC. All Rights Reserved112Q Financial ResultsFull-year ForecastsTopicsFull-year Earnings Forecast by Segment The situation for each segment is as follows based on the impacts of the semiconductor shortage and soaring raw materials prices at present and reflecting the results of cutbacks in SG&Aexpenses. Overall, there are no revisions to the initial forecast.Hydraulics and Pneumatics Fluid Measurement EquipmentDefense & Communications EquipmentNet salesOperating profit2022/3YoY Change2022/3YoY Change(Million yen)2021/3ResultsInitial ForecastCurrent ForecastAmountRateInitial ForecastCurrent ForecastAmountRateChange in Amount vs. Initial Forecast2021/3ResultsChange in Amount vs. Initial ForecastMarine Systems8,5228,9008,890+368+4.3%△10246150210△36 △14.6%+6010,35112,10012,080+1,729 +16.7%△20△42433010+434ー△3204,0034,3004,330+327+8.2%+30647460600△47 △7.3%+14016,28114,50014,470 △1,811 △11.1%△30537290400△137 △25.5%+110Others2,9243,2003,150+226+7.7%△50330250250△80 △24.2%Adjustment1△100△20△21ー+80△87△130△120△33ー+10Total42,08142,90042,900+819+1.9%01,2501,3501,350+100+8.0%©TOKYO KEIKI INC. All Rights Reserved00122Q Financial ResultsFull-year ForecastsTopicsFull-year Earnings Forecast by SegmentMarine Systems• Sharp recovery in demand for new shipbuilding in East Asian markets.• Maintenance services for marine systems are expected to trend steadily.• The exchange rate is expected to trend toward a weaker yen compared to the initial assumption of 104 yen/US dollar.• All markets in a recovery mode; continuing to contribute to net sales in 3Q and Hydraulics and Pneumatics beyond.•In terms of P/L, profit is expected to contract on deteriorating cost-of-sales ratio due to soaring raw materials prices and other factors.Fluid Measurement Equipment• Public-sector markets are expected to continue trending steadily.• The fire extinguishing systems market will see increased demand for halon and nitrogen fire extinguishing systemsDefense & Communications Equipment• The public-sector market is expected to see weaker sales due to the off-period in large projects up to this fiscal year as initially forecast.• The private-sector market is expected to see steady demand for equipment for semiconductor manufacturing, antenna stabilizers for mobile satellite communication, and accelerometers, etc.Others• Both Railway Maintenance and Printing Inspection Equipment are expected to trend according to the initial forecast.©TOKYO KEIKI INC. All Rights Reserved132Q Financial ResultsFull-year ForecastsTopicsProfit returns to shareholders[Commemorative dividend]We marked our 125th anniversary on May 1, 2021. We are extremely grateful for the long-standing support of our shareholders and stakeholders which made this milestone possible. As a result, we have decided to offer a commemorative dividend of 5 yen per share as part of the dividend for FY2021 to express our appreciation for your support over the years.[Shareholder benefits program (TOKYO KEIKI Premium Benefits Club)]No plans at present to change the shareholder benefits program.Dividend for the last five years and forecast for Fiscal 2020Annual dividend per share (yen)Payout ratio (consolidated) (%)Total return ratio (consolidated) (%)4.0046.846.82017/32018/32019/32020/32021/320.0025.0025.0025.002022/3（Forecast）Common, 25.00+ Commemorative, 5.0029.637.121.325.628.834.743.443.443.5―*From Fiscal 2017 (2018/3) onward, dividend amounts are those after consolidation of shares. (Dividend amount before consolidation of shares is 1/5 of amount shown.)Status of recent acquisition of treasury sharesTotal number of reacquired shares (yen)Acquisition cost(million yen)©TOKYO KEIKI INC. All Rights ReservedMay 2014May 2015Nov. 2015Nov. 2017Feb. 2019Nov. 2019310,000300,000335,00058,00076,80084,7008484848585*November 2017 and February 2019 show the numbers after consolidation of shares.8514Table of Contents1. Summary of financial results for 2Q of FY20212. Full-year forecasts of FY2021 3. Topics＜References＞©TOKYO KEIKI INC. All Rights Reserved152Q Financial ResultsFull-year ForecastsTopicsTopics1TOKYO KEIKI’s hydrogen compressor and filling machine supporting a hydrogen energy societyHydrogen stations are required to supply FCV with hydrogen with expectations as a clean energy.The TOKYO KEIKI Group is developing and manufacturing machines that increase pressure of hydrogen to 700 times the atmosphere to fill vehicles at hydrogen stations using its hydraulic and pneumatic control technologies.Hydrogen manufacturing systemHydrogen supplyHydrogen station equipmentBoost pressure of hydrogenHydrogen supplyFC forkliftFCVHydraulic-drive compressorAccumulatorDispenserCompact moving objects (drones, farm machinery, etc.)Mobile hydrogen stationStationary hydrogen stationSmall hydrogen filling systemHigh pressure hydrogen compressor installed at mobile hydrogen stationsHigh-pressure hydrogen compressor for hydrogen stations©TOKYO KEIKI INC. All Rights ReservedWe made a smaller sized hydrogen filler by combining the layout of hydrogen pipes and drive unit using our compact compressor and hydraulic drive source.162Q Financial ResultsFull-year ForecastsTopicsTopics2Supplied joystick controller to onshore monitoring facility used to support crewless maritime autonomous surface shipsTOKYO KEIKI is participating in demonstration trials under the DFFAS* Project comprising thirty Japanese companies with the goal of “the practical use of a crewless maritime autonomous surface ship (hereafter, “crewless ship”) by 2025.”The DFFAS Project built an onshore fleet operation center (FOC) in Makuhari, Chiba City to support the operation of crewless ships. This center carries out monitoring of crewless ships and conducts remote ship operations in the event of a contingency.TOKYO KEIKI has provided a marine autopilot with high performance Fiber Optic Gyrocompass (FOG) for the crewless ship. We have also supplied a MJS-9000 multifunctional joystick controller to the center. By connecting this MJS-9000 and the marine autopilot carrying out autonomous operation at sea, we are contributing to the reliable remote operation of this crewless ship.TOKYO KEIKI will continue contributing to the DFFAS Project using its automatic steering technologies cultivated in the field of marine autopilots and instrumentation technology for highly accurate positional and directional control using a FOG aimed at the practical use of this crewless ship being pursued by the project.*DFFAS: Designing the Future of Full Autonomous ShipThe Project is sponsored by the Joint Technological Development Programme for the Demonstration of Unmanned Ships under the administration of the Nippon Foundation.©TOKYO KEIKI INC. All Rights ReservedEmergency response block of the fleet operation center (remote ship operation function)(Joystick controller located on the operator’s left side)TOKYO KEIKI’s joystick controller installed at the emergency response blockPhoto courtesy of: DFFAS CONSORTIUM：Unauthorized use or reproduction strictly prohibited.172Q Financial ResultsFull-year ForecastsTopicsTopics3TOKYO KEIKI’s 125th AnniversaryOur pioneering history and the futureTOKYO KEIKI’s journey began in 1896 with the start of development of marine instruments as Japan’s first factory for manufacturing measuring instruments. The company worked to produce precision instruments in Japan during a time in which advanced technologies had to be imported from other countries, playing an important role in Japan’s modernization. Consistently since our founding, we have always tackled the challenges of developing new products and lived up to the expectations placed in us by society.“Tackling the challenges of resolving social issues as a pioneer”We will continue to grow over the next 50 years and beyond by passing down this unique TOKYO KEIKI DNA.We have set up a page (available in Japanese only) on our corporate website to mark our 125th anniversary with a history of the company.https://www.tokyokeiki.jp/125th/Website to mark our 125th anniversary ©TOKYO KEIKI INC. All Rights Reserved18History: Introduction of main products during each respective time periodFounder’s story (to be released soon)2Q Financial ResultsFull-year ForecastsTopicsTopics4Revamping of TOKYO KEIKI’s Historical Records RoomAs part of our 125th anniversary, we made improvements to our Historical Records Room. Although it is a small space, the room showcases our history for employees to appreciate and understand the founder’s commitment and use this knowledge for the future.Display items convey turning points in our history of product development and focus on our mainstay products at the timeExamples of display items1901Began manufacturing marine magnetic compasses used onboard the Japanese battleship Mikasa which played an important role at the Battle of Tsushima during the Russo-Japanese War of 1905.1913Developed Japan’s first electric clock. These clocks adorned many of Japan’s public buildings, including the Yasuda Auditorium at the University of Tokyo and major railway stations such as Tokyo Station.1964The first in the world to successfully commercialize an ultrasonic flowmeter considered to be impossible using technologies of the time. Our ultrasonic flowmeters contributed to optimal water management in water supply/sewerage systems and agricultural irrigation, etc.19*Currently not open to the public©TOKYO KEIKI INC. All Rights ReservedReferences©TOKYO KEIKI INC. All Rights Reserved20ReferencesChanges in consolidated profit & loss【Net Sales】【Operating Profit】Full year2Q（Million yen）（Million yen）（Million yen）2019/3-2Q2020/3-2Q2021/3-2Q2022/3-2QNet salesOperating profitOrdinary ProfitNet Profit*21,25020941330320,618△11834818,490△446△310△210©TOKYO KEIKI INC. All Rights ReservedYoY change(amount)YoY change(rate)18,380△110△0.6%26235229+472+545+439－－－21References（Million yen）Changes in net sales by segmentFull year2QMarine SystemsHydraulics and PneumaticsFluid Measurement EquipmentDefense and Communications EquipmentOthers（Million yen）2018/3-2Q 2019/3-2Q 2020/3-2Q 2021/3-2Q 2022/3-2QMarine SystemsHydraulics and PneumaticsFluid Measurement Equipment Defense and Communications EquipmentOthers※数値は調整前売上高4,4146,1539256,8501,0364,4026,5481,0418,0451,2144,5766,1351,1907,5641,1504,4564,8001,1897,0451,000©TOKYO KEIKI INC. All Rights ReservedYoY change(amount)YoY change(rate)4,2235,5231,451△233+723△5.2%+15.1%+262+22.1%6,000△1,045△14.8%1,182+182+18.2%*Net sales before adjustment.22References（Million yen）Changes in operating profits by segmentFull year2QMarine SystemsHydraulics and PneumaticsFluid Measurement EquipmentDefense and Communications EquipmentOthers（Million yen）2018/3-2Q 2019/3-2Q 2020/3-2Q 2021/3-2Q 2022/3-2QMarine SystemsHydraulics and PneumaticsFluid Measurement Equipment Defense and Communications Equipment8130201109155△44226△334△270△255△119△176177△60△78254303161△2369△73△108△130△107△42Others※数値は調整前営業利益©TOKYO KEIKI INC. All Rights ReservedYoY change(amount)YoY change(rate)△49 △21.8%+274+98+92+65ーーーー*Operating profits before adjustment23Quarterly changes in net salesReferences（Million yen）2018/343,803Full year2019/346,6922020/347,440©TOKYO KEIKI INC. All Rights Reserved2021/32022/342,081（Forecast）42,90024References（Million yen）Quarterly changes in operating profits2018/32019/32020/32021/32022/3Full year1,3192,4401,8751,250©TOKYO KEIKI INC. All Rights Reserved（Forecast）1,35025©TOKYO KEIKI INC. All Rights Reserved