Financial Results for First Half FY2023(Six months ended September 30, 2023)
November 20, 2023

Mitsuyasu Watanabe,
President and COO

OSAKI ELECTRIC CO., LTD.
Copyright (C) 2023 OSAKI ELECTRIC CO., LTD. All Rights Reserved1Summary
1. FY2023 2Q Results: Sales 44.2B yen, Operating Income 2.3B yen
Japan
YoY

Increased sales and profits
Increased smart meters Sales.
Temporary changes in product mix
Vs.
Increased sales and profits
Initial Increased smart meters Sales.
targets Changes in product mix and costreductions

Overseas
Increased sales and profits
Upturn in the materials
procurement environment
In line with initial plan

Consolidated
Sales（+4.6B）
OP（+1.8B）

Sales（+1.2B）
OP（+1.4B）

2. FY2023 Forecast: Sales 93.5B yen, Operating Income 4.3B yen
Japan
YoY

Decrease in sales and profits
Smart meters are at a trough indemand.
Rising prices of raw materials
Vs.
Increase in sales and profits
Initial Sales of smart meters increased.
targets Changes in product mix

Overseas

Consolidated

Increase in sales and profits
Upturn in the materials
procurement environment

Sales（+4.2B）
OP（+2.1B）

Increase in sales and profits
Higher sales value due to thedepreciation of the yen.
Cost reduction

Sales（+5.5B）
OP（+1.5B）

3. FY2024 Outlook■Japan：■Overseas：

Strengthen R&D and manufacturing organization, expand solutions
Improve profitability by expanding sales of smart meters and its HES (Headend-system) solution
Copyright
Copyright(C)(C)20232023 OSAKI ELECTRIC CO., LTD. All Rights Reserved2Agenda1. 1H FY2023 Financial Results
2. FY2023 Forecast
3. FY2024 Outlook
4. Capital Policy

Copyright (C) 2023 OSAKI ELECTRIC CO., LTD. All Rights Reserved31. 1H FY2023 Financial Results
1-1 Sales and Profits
1-2 Balance Sheet
1-3 Cash Flows

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1-1-1 Sales and Profits
YoY■Sales： Overall increase・ Increased in Japan due to steady growth in the Smart Meter Business・ Increased in overseas due to upturn in the materials procurement environment■Operating Income： Overall increase・ Increased in Japan due to sales increase and temporary changes in the product mix
・ Increased in overseas due to settling of materials prices

Vs. Initial targets■Overseas sales and profits were in line with the initial plan.
Higher sales and profits resulted from higher sales for Japan in the Smart
Meter Business, changes in product mix, and cost reductions.
（¥Mn）

FY2022 1H
ActualFY2023 1H
Initial Forecast

FY2023 1H
Actual

39,56243,00044,174

4,612

1,174

93,500Operating Income

535

900

2,325

1,790

1,425

4,300

Ordinary Income

348

700

2,415

2,067

1,715

4,200

Profit attributable toowners of parent

1,041

200

1,356

315

1,156

1,900

Net Sales

YoY

Change fromInitial Forecast

FY2023
Forecast

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1-1-2 Results by Segments（¥Mn）

FY2022 1HResults
39,562

FY 2023 1H
Actual
44,174

Smart Meters & Solutions in Japan

24,26525,012746

Smart Meters & Solutions Overseas

14,30718,927

4,620

Others989

235-754

Operating Income

535

2,325

1,790

Smart Meters & Solutions in Japan

1,163

1,903

739

Smart Meters & Solutions Overseas

-777

276

1,053

Others150

157

6-1-10-9Net Sales

Adjustments

YoY
4,612

*Others include Production Equipment (sold in FY2022 2Q) and Real Estate businesses

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1-2 Balance Sheet■ Decrease in Accounts Receivables due to collections both in Japan and overseas.
■ Increase in Inventory due to forward build-up in preparation for future shipments
both in Japan and overseas, increase for overseas caused by depreciation of Yen.
■ Net Cash: 4.5B yen, Capital Adequacy Ratio: 51.3％（¥Mn）
March 31st, 2023

September 30th,
2023

93,26893,307

Current Assets56,618

54,538Fixed Assets

36,64938,769+2,11934,63833,012-1,626

AssetsLiabilities

Changes

Factors+39

Accounts Receivable -3,348-2,079 Cash -3,968
Inventory +5,040

Current Liabilities

25,00822,590Accounts Payable -1,384-2,417
Borrowing -225

Fixed Liabilities

9,630

10,421+791

58,62960,295+1,665

Capital45,93347,894+1,960

Non-controlling

12,228

11,933

-295

466

466

－

49.2%

51.3%

2.1%

EquityOthersCapital Adequacy Ratio

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1-3 Cash Flows■Cash flow from operating activities was 0.5B yen with a temporary
increase in inventories.
Free cash flow △1.1B yen
Income before income taxes and minority interests(Increase) decrease in notes and accounts receivable(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable
OthersOperating activities
Purchase of property, plant and equipment
Expenses from derivative transactions
OthersInvesting activities
Increase (decrease) in short-term debts
Dividends paid
OthersFinancing activities
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of 1H（¥Mn）

FY2023
1H
2,400
4,008
-4,114-1,621-137535-614-1,006-20-1,640-684-1,083-128-1,89650
12,7189,766

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2. FY2023 Forecast

Copyright (C) 2023 OSAKI ELECTRIC CO., LTD. All Rights Reserved

92-1 FY2023 Forecast■Based on the latest trends, the company has revised its full-year forecast.

（¥Mn）

FY2023 1H

FY2023

FY2023 2H
YoY

YoYForecast

ActualYoY
Initial Forecast

Revised Forecast

Changefrom
InitialForecast

Net Sales

44,174

4,612

49,326-364

88,00093,500

4,247

5,500

Operating Income

2,325

1,790

1,975

284

2,800

4,300

2,074

1,500

Ordinary Income

2,415

2,067

1,785

249

2,400

4,200

2,315

1,800

Profit attributable toowners of parent

1,356

315

544

267

1,000

1,900

581

900

Copyright (C) 2023 OSAKI ELECTRIC CO., LTD. All Rights Reserved102-2 FY2023 Forecast by Segment■YoY： Japan:

Smart meter sales decreased due to trough in demand.
Profits are expected to decrease due to lower sales and higher raw material costs.

Overseas: Sales increased due to upturn in the materials procurement environment, mainly in Europe.
In addition to sales increase, profits are expected to increase due to setting of component prices.

■Vs. Initial Forecast：
Japan:

Sales increased due to smart meter business and profit increased due to changes in the product mix.

Overseas: Sales increased due to depreciation of yen.
Profits are forecast to rise due to stabilization of depreciation of GBP pound and cost reductions.

FY2022

FY2023

1H

1H

ActualActualNet Sales

39,562

44,174

Smart meters & solutions in Japan

24,276

Smart meters & solutions overseas

FY2022

FY2023

FY2023

InitialYoY（¥Mn）

Changefrom
InitialForecast

YoY

ActualForecast

Forecast*

4,612

89,25388,00093,500

4,247

5,500

25,022745

54,42750,50053,000-1,4272,500

14,647

19,5594,912

34,61338,00041,000

6,387

3,000

1,044

287-756

1,333

600

600-733ーAdjustments

-405

-695

-289

-1,121-1,100-1,100

21ーOperating Income

535

2,325

1,790

2,226

2,800

4,300

2,074

1,500

Smart meters & solutions in Japan

1,163

1,903

739

3,816

1,900

3,000-816

1,100

Smart meters & solutions overseas

-777

276

1,053

-1,886

600

1,000

2,886

400

Others

150

157

6304

300

300

-4ー

-1-10-9-7ーー

7ー

OthersAdjustments*Announced on November 7th
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3. FY2024 Outlook
3-1 Japan Business
3-2 Overseas Business

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123-1 Japan Business
Smart Meter Business（B yen）

Solution Business（B yen）

Sales

4035

Sales

20

34.9
30.5303318161425

1313

FY2023
Initial Forecast

FY2023
Forecast

12.5

1220108156104520■YoY：0FY2022
ActualFY2023
Initial Forecast

FY2023
Forecast

Decrease due to trough in demand■ Vs. Initial Forecast:
Increase■ FY2024 Outlook ：Strengthen organization for development andmanufacturing of next generation smart meters

FY2022
Actual■YoY：

Increase in the Energy Solutions and Smart LockBusinesses■ Vs. Initial Forecast:
In line with initial plan

■ FY2024 Outlook ：Expand Energy Solutions and Smart Lock
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3-2-1 Overseas Business (Oceania, Europe)
Oceania

Europe (mainly UK)（B yen）（B yen）

Sales

20201816

16.5

15.6

17.5

1814121210108866442200

FY2022
ActualFY2023
Initial Forecast

15.516FY2023
Initial Forecast

FY2023
Forecast

1614■YoY：

Sales

FY2023
Forecast

Steady shipments■ Vs. Initial Forecast:
Increase due to depreciation of the yen■ FY2024 Outlook ：Anticipate stable growth and engage in further
cost reduction

10.1

FY2022
Actual■YoY：

Increase due to upturn in the material procurement
environment■ Vs. Initial Forecast:
Increase due to depreciation of the yen■ FY2024 Outlook ：Continued demand for smart meters in the UK
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143-2-2 Overseas Business (Developing Countries)
AsiaMiddle East and Others（B yen）（B yen）

Sales

10594.58473.5

65.834.5542.5

110.5

00

FY2023
Initial Forecast

22

FY2022
ActualFY2023
Initial Forecast

FY2023
Forecast

1.52

FY2022
Actual2.1233Sales

FY2023
Forecast■YoY：
Decrease due to withdrawal from low-profit markets■ Vs. Initial Forecast: Increase in some regions■ FY2024 Outlook ：Improved profit margins through market
selection and focus, and expansion of industrialmeters■YoY： Unchanged■ Vs. Initial Forecast: In line with initial plan
■ FY2024 Outlook ：Expectations for market growth, increase profits byexpanding sales of head-end-system solutions andmeters
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4. Capital Policy
Financial goals and Approach to Capital Policy

ProfitGrowth

FY2022

FY2023
ForecastApproach

2,226M yen

4,300M yen

Carry out group growth strategy and attain OP 5.5B yen
by FY2025

2.9%

4.0%

Attain ROE exceeding capital cost (currently at 5.5%) by
FY2025, and aim for 8% and higher as mid-term goal

FCF

1,610M yen（1H Actual）△1,105M yenPortfolio
Management

Sale ofmanufacturingequipment
business

CapitalAdequacy
Ratio

49.2%

OP

ROE

CapitalEfficiency

Financial
Soundness

Dividend

Shareholder
Returns

Repurchaseof own
sharesGenerate cash to provide investment and dividends(Promote portfolio Set and monitor KPI by products/services and regions tooptimization)
reinforce portfolio management（1H Actual）
51.3%

Keep capital adequacy ratio at around 50%

Annual dividend of Annual dividend of Provide either the higher of DOE (Dividend on Equity
20 yen per share
20 yen per share Ratio) of 2% or pay-out ratio of 30%
Total 1.25B yen
acquisition

Evaluate cash, working capital, business performance,(Continued study) stock price, status of investments and other factors indecision-making process.
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Appendix

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Sales by Business Portfolio (Excluding intercompany sales)■Smart meters & solutions in Japan（¥Mn）

FY2019Smart meter business
Solution businessSwitchgear business
Total

35,886
10,006
5,926
51,819FY202032,016
10,5105,641
48,169FY2021
29,425
10,531
6,025
45,983

FY2022
34,885
12,483
7,037
54,406FY2023 1H
16,896
5,295
2,820
25,012■Smart meters & solutions overseas（¥Mn）

FY2019
OceaniaEuropeAsia
Middle East and others
Total

9,422
9,544
8,753
8,77036,490

FY2020
9,154
8,938
4,882
3,703
26,678FY2021
10,642
11,3396,041
1,071
29,095

FY2022
15,628
10,1295,800
2,062
33,620

FY2023 1H
7,771
7,839
2,601715
18,927

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1H FY2023 Operating Profit Change (YoY)
Smart meters & solutions in Japan

1.15

FY22 1H OP

(¥Bn)

+0.8

△0.2

GP margin
increase

SG&A
increase

1.9+0.15

Sales increase

FY23 1H OP

Smart meters & solutions overseas+0.25+0.05+0.3+0.25+0.55△0.8
FY22 1H OP Sales increase

GP marginincrease

SG&Adecrease

Forex（USD/JPY） FY23 1H OP

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Reinforce Business Portfolio■Smart meters & solutions in Japan: Monitored by products and services
Business Portfolio
Position and Basic Policy
Smart meter business

Drive as a core business and pursue stable profit contribution.

Solution business

As focus businesses in Japan, provide solutions for social issues
such as energy saving and decarbonization by leveraging strong
smart meter business. Aim to improve profitability in Japan.

Switchgear business

Provide to stable demand and maintain revenue and profit
contributions.

■ Smart meters & solutions overseas: Monitored by regions
Business Portfolio
Position and Basic Policy
Oceania

Reinforce solution business by combining smart meters andhead-end systems solution. Aim for stable profit growth.

EuropeImprove profitability in UK by improving product mix and reducing
production costs.

Asia

Improve profitability by focusing on high margin products andservices, such as solution services and commercial & industrial
meters.

Middle East and Africa

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Shareholder Return Policy
Dividend Policy■Provide dividends in accordance with financial performance■In principle, providing either the higher of DOE (Dividend on Equity Ratio) of 2％or Pay out ratio of 30%
FY2023(Yen)Interim/year-end

FY2019FY2020

FY2021

1H Results/Forecast

FY202210 / 1010 / 1010 / 1010 / 1010 / 10Annum2020202020Total dividendpaidAnnum

978 Mn980 Mn974 Mn

942 MnPayout ratio

Annum

81.7%

203.3%―71.8%

49.3%

DOE

Annum

2.2%

2.2%

2.3%

2.3%

2.0%

Dividend pershare

Policy on Repurchase of own shares■Placing higher capital efficiency as priority, consider repurchase of own shares option while
taking factors such as cash on hands, working capital, financial performance and stock pricetrend, and investment opportunities into consideration
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OSAKI ELECTRIC CO., LTD.
TSE Prime Market
Code: 6644

■Figures in the document are for reference and include unaudited figures.
■Forward-looking figures are based on data and information available up to the date of its announcement
and may differ significantly from actual results.
■Please refrain from copying the data, contents and other information subjected to copy right.