Financial Results for First Half FY2021(Six months ended September 30, 2021)
November 18 th, 2021

Mitsuyasu Watanabe,
President and COO

OSAKI ELECTRIC
Copyright (C) 2021 OSAKI ELECTRIC CO., LTD. All Rights Reserved1Summary
1. 1H FY2021 Financial Results
Japan
YoY

Decrease in sales and profits
Sales of smart lock decreased YoY
Raw material prices rose

Changes Decrease in sales and profits
from Initial Solution services were below
Forecasts

expectation

Overseas

Consolidated

Increase in sales and profits
Shipments to Oceania andEurope increased

Sales increaseand profit
decrease

Decrease in sales and profits
Delay in manufacturing fromelectronic component shortage

Decrease insales andprofits

2. FY2021 Full-Year Forecasts• Electronic component shortages have been hindering smart meter business,
which is the main business both in Japan and overseas.
• Because it is difficult to reasonably accumulate the degree of financial impact
at the moment, the Company decided to forego the disclosure of financial
forecasts for the FY2021.

3. Progress on Mid-term Management Plan
• No changes in mid-term demands in Japan nor overseas, while electronic
component shortage remains pressing issue.
• Overseas: Demand in developed countries is strong, while spread of COVID-19
has pushed projects behind schedule in developing regions.
• Japan: Strengthen solution businesses in fast-growing carbon neutral industry.
Copyright
Copyright (C)(C) 2021
2021 OSAKIOSAKIELECTRIC
ELECTRICCO.,
CO.,LTD.
LTD.All
AllRights
RightsReserved
Reserved2

Agenda1. 1H FY2021 Financial Results
2. Progress on Mid-term Management Plan
3. Topics

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１. 1H FY2021 Financial Results
1-1 Sales and Profits
1-2 Balance Sheets
1-3 Cash Flows

Copyright (C) 2021 OSAKI ELECTRIC CO., LTD. All Rights Reserved4

1-1-1 Sales and Profits
YoY■Sales: Overall increase YoY from expanded sales in overseas (Oceaniaand Europe) despite decrease in smart lock sales in Japan.
■Operating income: Overall decrease from lower profitability of smart
meters in Japan due to severe price competition and higher material
costs, despite improved overseas profits.
Reasons for Changes from Initial Forecasts■Both sales and profits were below the initial forecasts.
Smart lock business and solution services were slower in Japan.
Manufacturing overseas was impacted from a delay in procuring
electronic components.
FY2021 Full-Year Forecasts■Because it is difficult to reasonably accumulate the degree of financial impact
from electronic component shortages at the moment, the Company decided toforego the disclosure of FY2021 full-year forecasts.
（¥Mn）
FY2020 1H
ActualInitia Forecasts

FY2021 1H
Actual

35,73439,00036,087

Operating Income

767

800

Ordinary Income

744

Profit attributable toowners of parent-202

Net Sales

FY2021 1H

Initial ForecastsFY2021
Forecasts

353-2,913-461-306-339

-

700

531

-213

-169-100-236-34-336-YoY

Changes from

Copyright (C) 2021 OSAKI ELECTRIC CO., LTD. All Rights Reserved51-1-2 Results by Segments（¥Mn）
FY2020 1H

FY2021 1H

Results

ActualYoY

35,73436,087353

Smart meters & solutions in Japan

22,30821,405-903

Smart meters & solutions overseas

12,916

14,613

1,697

Production equipment

627

337

-290

Real estate

275

277

1

Adjustments-393-546

-152

767

461-306

Smart meters & solutions in Japan

948

366-581

Smart meters & solutions overseas

-224

118

343

Production equipment-94-162-67

Real estate

138

1390Adjustments

0-0-1

Net Sales

Operating income

Copyright (C) 2021 OSAKI ELECTRIC CO., LTD. All Rights Reserved

61-2 Balance Sheets■ Accounts receivable decreased due to a decline in sales and collections ofreceivables, and account payable decreased from payment of payables.
■ Inventories increased due to upcoming shipments of switchgear in Japan.
■ Net Cash: ¥9.5 billion
Capital Adequacy Ratio ：52.3％（¥Mn）
September 30th,March 31st, 2021
2021

Assets90,989Factors

Changes

89,087-1,901

Current Assets

53,09050,069Accounts Receivable -3,503-3,020Inventory +835

Fixed Assets

37,89839,017+1,11832,10130,586-1,514Current Liabilities

18,962

23,362+4,400

Fixed Liabilities

13,1397,224-5,91458,88758,500-387

Capital46,614

46,597-16

Non-controling

11,764

11,393

-370

509

509

-51.2%

52.3%

+1.1%

Liabilities

EquityOthersCapital Adequacy Ratio

Accounts payable -1,156

Copyright (C) 2021 OSAKI ELECTRIC CO., LTD. All Rights Reserved71-3 Cash Flows■ Even in a difficult business environment, operating cash flow is
2.6 billion yen and free cash flow is 1.6 billion yen.

（¥Mn）

FY2021
1H
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
Investing activities
Increase (decrease) in short-term debts
Increase (decrease) in long-term debts
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

531
4,013
-305
-1,376-228
2,633-1,033-548-9-1,302-1,860
197
14,654
14,590

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82. Progress on Mid-term Management Plan
2-1 Overseas Business
2-2 Japanese Business

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92-1-1 Overseas Business
Oceania Sales (Bn yen)
5.5

6.0

5.1

5.7

4.2

4.1

FY2020
1st HalfEurope (UK) Sales (Bn yen)2020
FY2021
1st Half Plan 1st Half ActualFY2020
1st Half

FY20212020
1st Half Plan 1st Half Actual

1H analysis• Increased from previous year where installment of smart meters were delayed from city
lockdowns (Oceania +1.0 Bn, Europe +1.5 Bn).
• Installment of smart meters in Oceania (Eastern Australia and New Zealand) and UK
project are in good progress.
• Lower than initial forecast due to delay in manufacturing from electronic component
shortage.
FY2021 Outlook• Expect to see stable demand.
• Challenges remain to secure electronic components.
Copyright (C) 2021 OSAKI ELECTRIC CO., LTD. All Rights Reserved10

2-1-2 Overseas BusinessMiddle East and others

Asia
Sales (Bn yen)

2.8
2.2

Sales (Bn yen)

2.7
2.1
1.2
0.6

FY2020
1st Half

2021
FY2021
1st Half Plan 1st Half Actual

FY2020
1st Half

2021
FY2021
1st Half Plan 1st Half Actual

1H analysis• Profits in Asia increased from previous year where impact of COVID-19 was significant.
The results were inline with the initial conservative forecast.
• Profits in Middle East and others were lower compared with previous year and the initialforecast. Contributions from the Iraq (Kurdistan Regional Government) project has
subsided while no additional projects complemented for the drop.
FY2021 Outlook• Impact of COVID-19 has delayed projects in Asia, Middle East and other regions, andbusiness outlook remains severe.
• Challenges remain to secure electronic components.
Copyright (C) 2021 OSAKI ELECTRIC CO., LTD. All Rights Reserved11

2-2-1 Japanese Business■Smart meters business• Business environment remains severe with demand peak-out
and price competition. Preparing for FY2024 renewal demandfor next-generation smart meters.
• Challenges remain to secure electronic components.

■Energy management systems• Slow investments by customers in 1st half due to spread ofCOVID-19, resulting in stagnant sales growth.
• Aim to expand profits by providing services in growing areasof energy management market, such as supporting
customers to achieve decarbonization measures.

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2-2-2 Japanese Business■Smart locks• Delayed installation in 1st half due to the spread of COVID-19
despite high demand for tools to enable “non-contact” or“non-face-to-face” services.
• Expanding customers and industries, including new partners
in developers to pursue digitalization at construction sites.

For common areas of company housing and buildings

New platform “OPELO COMMONS©”
・For common areas
・Not limited to the real estate management
industry, it is widely provided as a service forcorporations and individuals.

Entry/exit management at construction sites, etc.

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13

３．Topics
Support for TCFD
November 2nd, 2021 – OSAKI declared its support for the Task Force on
Climate-related Financial Disclosures (TCFD).
■Osaki recognizes risks related to climate change and its impact on oursociety and environment as material issues to the Company, and has
worked to minimize the risks by providing energy management solutions.
■Osaki will strengthen organizational framework to disclose in accordancewith the TCFD guidance.

SDGs promotion project
Launched a group-wide project in July 2021 to promote and enforce
sustainability management, including supporting the TCFD guidance.

Selection of “Prime Market”
Resolved on November 2nd, 2021 to select the "Prime Market“ of the Tokyo
Stock Exchange which will launch on April 4 th, 2022.
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14

Global Energy Solution Leader
Providing tomorrow’s energy solution for a better societyAppendix
・Financial data
・Sustainability management
・Shareholders Return Policy

Copyright (C) 2021 OSAKI ELECTRIC CO., LTD. All Rights Reserved

16

1H FY2021 Operating Profit Change (YoY)
Smart meters & solutions in Japan

(¥Bn)

0.95
-0.15
+0.15

0.35

SG&A

FY21 1H OP-0.6
FY20 1H OP

Sales decrease

GP margindecrease

Smart meters & solutions overseas+0.3
0.1+0.3-0.3-0.2
FY20 1H OP

Sales increase

GP marginincrease

SG&A

FY21 1H OP

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17

Sales by Region（Excluding intercompany sales）（¥Mn）
FY2020 FY2020 FY2020
FY2021 FY2021
FY2016 FY2017 FY2018 FY2019
FY2020
1Q
2Q
3Q
1Q
2Q
Consolidated
Net SalesJapan

86,159 78,780 82,089 90,069 19,347 35,734 53,597 76,255 17,720 36,087
63,236 59,927 57,735 53,475 11,643 23,130 35,049 49,641 10,776 21,927

Overseas

22,923 18,852 24,353 36,593

7,703 12,603 18,547 26,614

6,943 14,159

Oceania

9,110

7,807

9,522

9,422

2,211

4,116

6,201

9,154

2,186

5,093

Europe

5,248

3,858

4,449

9,558

2,375

4,181

5,848

8,952

3,167

5,750

Asia

7,431

6,168

7,086

8,841

1,336

2,164

3,264

4,803

1,306

2,737

Middle East,Others

1,133

1,017

3,295

8,770

1,780

2,141

3,232

3,703

282

578

Overseas
Sales Ratio

26.6% 23.9% 29.7% 40.6% 39.8% 35.3% 34.6% 34.9% 39.2% 39.2%*1 Figures base on Annual Report.
*2 Electronic component shortages have been hindering smart meter business, which is the main businessboth in Japan and overseas. Because it is difficult to reasonably accumulate the degree of financial impact
at the moment, the Company regrets to forego the notice of revised financial forecasts for the FY2021.

Copyright (C) 2021 OSAKI ELECTRIC CO., LTD. All Rights Reserved

18

Sales by product and service(Excluding intercompany sales)■Smart meters & solutions in Japan（¥Mn）

FY2015FY2016FY2017FY2018FY2019FY2020Meters25,55934,973

31,94731,14927,136

22,811

Monitor Control

2,665

2,605

2,585

2,856

3,055

3,565

Switchgears

8,208

8,066

7,144

7,097

7,847

7,725

VCTs
Others（adjustments）

3,965
12,977

4,400
12,206

4,925
11,694

4,772
10,374

4,767
9,012

4,094
9,972

Total

53,37662,25258,29656,251

51,81948,169*1 Referential figures based on managerial accounting*2 Monitor Control: Energy management systems, smart locks, etc.

■Smart meters & solutions overseas（¥Mn）

FY2015FY2016FY2017FY2018FY2019FY2020Meters13,261

14,618

11,48914,65225,263

18,248

Monitor Control

6,781

8,0927,132

9,299

11,226

8,429

Total

20,04322,71018,621

23,95236,49026,678*1 Referential figures based on managerial accounting*2 Monitor Control: Meter related systems, communication hubs, etc.
Copyright (C) 2021 OSAKI ELECTRIC CO., LTD. All Rights Reserved19

To strengthen sustainability management
Strengthening the Sustainability Management by the Groupwide SDGs Project

Environment

Environment-conscious operations

CO2 reduction
Measures

Products and services
for CO2 reduction

Provide products and services for optimalenergy management in and out of Japan
Environmentfriendly Group

Waste reduction

Environment-friendly products
Reduce waste, increase recycling
Reduce chemical material waste

GovernanceManagementSupervision

SocialSocially responsible operations

Technology

Safer and more secure society withmetering solutions technologies

Create new values by applying AI and IoTtechnologies for various services for safer andmore secure society

Diversity

Co-working in a diversified poolof people

Create new values in collaboration withpeople across all boarders of nationalities,organizations, etc.

Governance supporting
E&S

Elevate corporate value and minimize risks

Board effectiveness

Advisory committees
Executive officer systemEvaluate board effectiveness every year
continual efforts to elevate governanceSet the committees for appointment and compensation
Appoint an outside board as Chairman.
Majority are outside members
Attain fairness, objectivity and transparency
Introduction of executive officer system in June 2020
Ratio of Independent Directors: 29%
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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% orPay out ratio of 30%.
FY2021FY2018FY2019FY202010 / 1010 / 1010 / 1010 / 1010 / 10Annum2020202020

Total dividend Annumpaid

976 Mn978 Mn978 Mn980 MnPay out ratio

Annum

36.6%

54.1%

81.7%

203.3%

DOE

Annum

2.3%

2.2%

2.2%

2.2%

(Yen)

Dividend pershareInterim/year-end

FY2017

1H Results/Forecast

Policy on Share Buy-back■Placing higher capital efficiency as priority, consider the share buy-back option
while taking factors such as cash on hands, working capital, financial performanceand stock price trend, and investment opportunities into consideration.
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OSAKI ELECTRIC CO., LTD.
TSE 1st Section
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.