Consolidated Basis Results of the Second Quarter for Fiscal 2023
(April 1, 2023 – September 30, 2023)
November 7, 2023
Registered Company name:TOPY INDUSTRIES, LIMITED

Stock listing: Tokyo, Nagoya stock exchanges

Code number:
Representative:

7231
URL: http://www.topy.co.jp/en/index.html
Hiromi Ishii, Representative Director, President and CEO

Contact:

Tetsuya Sakai, Managing Executive Officer and General Manager, General Affairs Department
Telephone:03-3493-0777 / (Overseas) 81-3-3493-0777

Scheduled date for submission of quarterly report: November 10, 2023

Scheduled date for dividend payment: December 5, 2023

Preparation of supplementary quarterly materials: Yes
Holding of quarterly financial results meeting:Yes (for institutional investors and analysts)(Figures of less than ¥1 million have been omitted)
1. Consolidated Financial and Operating Results of the Second Quarter for Fiscal 2023 (April 1, 2023 – September 30, 2023)(1) Consolidated Operating Results (Cumulative)(Percentage figures are changes from the same period of the previous fiscal year)
Net sales
Second Quarter of Fiscal 2023
Second Quarter of Fiscal 2022
(Note) Comprehensive income:Operating profit

Million yen
165,938
156,109

%
6.3
24.8

Million yen
3,985
1,540

Second Quarter of Fiscal 2023
Second Quarter of Fiscal 2022

Million yen
4,888
2,794

%
74.9
－

Profit attributable toowners of parent
Million yen
%
3,381
62.3
2,082
－

¥11,517 million (95.8%)¥5,881 million (176.7%)

Profit per shareafter full dilution

Profit per shareYen
148.13
90.99

Second Quarter of Fiscal 2023
Second Quarter of Fiscal 2022

%
158.6
－

Ordinary profit

Yen
－
－

(2) Consolidated Financial Position
Total assets

Net assets

Million yen
312,274
292,322

Second Quarter of Fiscal 2023
Fiscal 2022
(For reference) Shareholders’ equity:

Million yen
131,349
121,425

Equity ratio

Net assets per share
%
41.7
41.1

Yen
5,698.01
5,268.92

Second Quarter of Fiscal 2023 ¥130,066 million
Fiscal 2022

¥120,265 million

2. Dividends
Dividends per share
3Q-endYen
Yen
Yen
Fiscal 2022
20.00
－
－
Fiscal 2023
30.00－
Fiscal 2023 (Forecasts)－(Note) Whether changes to the latest dividend forecasts have been made: Yes
1Q-end2Q-endEnd of FY

Annual

Yen
68.00

Yen
88.00

78.00

108.00Concerning the details, please refer to “Notice Regarding Differences between Financial Forecasts and Actual Results of theSecond Quarter of Fiscal 2023 and Revision of the Dividend Forecast (Dividend Increase)” published today.

3. Consolidated Financial Forecasts for Fiscal 2023 (April 1, 2023- March 31, 2024)(Percentage figures are changes from the previous fiscal year)
Net sales
Full year

Million yen
343,000

Operating profit% Million yen
2.5
10,000Ordinary profit% Million yen
39.4
11,000%36.8

Profit attributable toowners of parent
Million yen%
7,500 18.6

Profit per shareYen
328.56(Note) Whether changes to the latest forecasts for consolidated figures have been made: Yes
Concerning the details, please refer to “Notice Regarding Differences between Financial Forecasts and Actual Results of theSecond Quarter of Fiscal 2023 and Revision of the Dividend Forecast (Dividend Increase)” published today.

* NOTE(1) Changes in the State of Material Subsidiaries during the Period: None
Newly included: – (Name) –Excluded: – (Name) –(2) Adoption of Special Accounting Methods for Preparation of Quarterly Consolidated Financial Statements: Yes
Note: For details, please refer to “(3) Notes Regarding Quarterly Consolidated Financial Results (Application of special accounting methods forpresenting quarterly consolidated financial statements)” under “2. Quarterly Consolidated Financial Statement and Important Notes” on page 8 of
the attached materials.

(3) Changes in Accounting Principles, Changes in Accounting Estimates, and Retrospective Restatements(a) Changes in accounting principles accompanying the amendment of accounting standards: None(b) Changes other than those in (a) above: None(c) Changes in accounting estimates: None(d) Retrospective restatements: None
(4) Number of Shares Issued (Common shares)(a) Number of shares issued at the end of the period (including treasury shares)
Second Quarter of Fiscal 2023
24,077,510 sharesFiscal 2022
24,077,510 shares(b) Number of treasury shares at the end of the period
Second Quarter of Fiscal 2023
1,250,856 sharesFiscal 2022
1,252,026 shares(c) Average number of shares issued during the period
Second Quarter of Fiscal 2023
22,825,714 shares
Second Quarter of Fiscal 2022
22,890,820 shares* These consolidated financial results are not included in the scope of quarterly audits by certified public accountants or audit
corporations.
* Explanation of the Appropriate Use of Performance Forecasts and Other Related Items(Caution concerning future descriptions etc.)
The above estimate has been compiled based on information available at the time this disclosure was made. The actual results may vary from the forecast
due to various factors that will arise in the future.
For assumed conditions underlying the earnings forecast and cautionary statements in using the earnings forecast, please refer to “Explanation Regarding
Future Estimate Information such as Consolidated Financial Performance Estimates” on page 3.
(Method for acquiring supplementary briefing material on quarterly financial results)
The Company plans to hold a briefing session for institutional investors and securities analysts. A video of this briefing session and briefing material will be
posted on the Company’s website promptly after the briefing session.

Index of Attached Documents
1. Qualitative Information Regarding Results of the Second Quarter for Fiscal 2023 .............................................................

2(1) Explanation Regarding Consolidated Operating Results ...............................................................................................

2(2) Explanation Regarding Financial Position .....................................................................................................................

3(3) Explanation Regarding Future Estimate Information such as Consolidated Financial Performance Estimates .............

3

2. Quarterly Consolidated Financial Statements and Important Notes ....................................................................................

4(1) Quarterly Consolidated Balance Sheets .........................................................................................................................

4(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income .....

6

Quarterly Consolidated Statements of Income .........................................................................................................
(For the Six-month Period) .................................................................................................................................

6

Quarterly Consolidated Statements of Comprehensive Income ................................................................................
(For the Six-month Period) .................................................................................................................................

7(3) Notes Regarding Quarterly Consolidated Financial Results ..........................................................................................

8(Note related to going-concern assumption) ................................................................................................................

8(Note on significant changes in the amount of shareholders’ equity) ..........................................................................

8(Application of special accounting methods for presenting quarterly consolidated financial statements) ...................

8

Note: This document has been translated from the original Japanese version for reference purposes only. In the event of any
discrepancy between this translated document and the original Japanese version, the original shall prevail.
The original disclosure in Japanese was released on November 7, 2023 at 13:30 (GMT+9).
The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from thetranslation.

- 1 -1. Qualitative Information Regarding Results of the Second Quarter for Fiscal 2023
(1) Explanation Regarding Consolidated Operating Results
During the first half of the fiscal year under review, the global economy experienced an overall recovery, despite geopoliticalrisks from the protraction of the situation in Ukraine, unstable market conditions caused by monetary tightening around theworld, and the impact of the stagnant real estate market in China. There was a gradual recovery in the Japanese economy, as
consumer spending recovered due to the easing of behavioral restrictions, and capital investment was strong. Regarding thebusiness environment surrounding TOPY INDUSTRIES, LIMITED (the “Group”), although cost fluctuations affecting raw
materials, energy and logistics and the economic slowdown in China continue to require close monitoring, the impact of shortages
in the supply of semiconductors and other components has lessened in the automotive industry, and production is on a recovery
track.
Under this business environment, we have set four key areas—promote segment management, strengthen overseas
profitability, strengthen domestic business base, and contribute to decarbonization—for our Group Basic Strategy, and we are
steadily implementing the Medium-term Management Plan “TOPY Active & Challenge 2025”. As one part of these efforts, thenewly established Overseas Business Strategy Department continues to tackle the strengthening of alliances and discuss thedevelopment of new markets. In addition, we are also working on financial strategies to improve the cash conversion cycle(CCC) such as shortening the collection period of trade receivables and properly managing inventories.
The financial results for the first six months of the fiscal year under review include consolidated net sales of ¥165,938 million(up 6.3% year on year), mainly due to increased sales of wheels for passenger vehicles due to the recovery trend in automobile
production. As for profit, operating profit was ¥3,985 million (up 158.6% year on year), ordinary profit was ¥4,888 million (up74.9% year on year), and profit attributable to owners of parent was ¥3,381 million (up 62.3% year on year), showing significant
improvements, due to an increase in the difference between steel scrap prices and steel selling prices.
Performance by Segment(Steel Business)
In the steel industry, demand for steel products from the manufacturing industry recovered, but domestic crude steel production
decreased year on year, as demand from the construction industry stagnated. Moreover, steel scrap prices were lower year on
year, while electricity prices remained high, albeit on a downward trend.
Given these circumstances, the Group worked to optimize steel sales prices as the price gap with purchase prices of steel scrap,
the raw material for such products, widened, and optimized the product mix with a focus on profit, etc. As a result, net sales
increased to ¥54,262 million (up 8.2% year on year), and operating profit increased to ¥4,614 million (up 59.4% year on year).
(Automotive & Industrial Machinery Components Business)
In the automotive industry, automobile production volume increased year on year in Japan as impacts from the supply shortageof semiconductors and other parts lessened. By vehicle type, the recovery in passenger vehicles was remarkable, while therecovery in trucks and other commercial vehicles was delayed. In the construction machinery industry, while demand forhydraulic excavators was strong in North America, it declined significantly in China and showed signs of slowing down in otherregions. Demand for mining machinery remained strong amid robust demand for resources.
Under these circumstances, sales of wheels for passenger vehicles increased and the Group worked to optimize sales pricing
in accordance with the cost of raw materials. As a result, net sales increased to ¥101,180 million (up 6.9% year on year), andoperating profit increased to ¥2,127 million (up 22.8% year on year).
(Power Business)
Net sales decreased ¥6,892 million (down 15.6% year on year) due to a decrease in electricity sold due to planned shutdowns
for inspections and maintenance for statutory periodic inspections and lower electricity demand this summer than in the same
period of the previous fiscal year. However, operating loss improved and reached ¥639 million (compared with ¥1,066 million
in the same period of the previous fiscal year) due to progress in the optimization of electricity sales prices.
(Leasing Business)
In the leasing business, operating profit was ¥350 million (down 1.5% year on year).
(Others)
The Group is involved in the manufacture and sale of synthetic mica, and operates a civil engineering and construction
business, sports club OSSO, and other businesses. Net sales came to ¥3,602 million (up 14.5% year on year) and operating profit
was ¥372 million (up 12.5% year on year).

- 2 -(2) Explanation Regarding Financial Position
Total assets at the end of the second quarter of the consolidated fiscal year under review stood at ¥312,274 million, an increaseof ¥19,951 million from the end of the previous consolidated fiscal year. This was mainly due to an increase of ¥8,486 million
in notes and accounts receivable trade and contract assets, an increase of ¥6,893 million in investment securities, and a decreaseof ¥1,090 million in merchandise and finished goods.
Total liabilities were ¥180,924 million, an increase of ¥10,027 million compared with the end of the previous consolidated
fiscal year. This was caused mainly by an increase of ¥6,398 million in electronically recorded obligations, an increase of ¥5,000
million in the current portion of bonds, and a decrease of 2,853 million in long-term debt.
Total net assets came to ¥131,349 million, an increase of ¥9,924 million from the end of the previous consolidated fiscal year.
This was mainly due to an increase of ¥4,945 million in valuation difference on available-for-sale securities, and an increase of¥2,974 million in foreign currency translation adjustments.
(3) Explanation Regarding Future Estimate Information such as Consolidated Financial Performance Estimates
Despite continuing expectations of recovery, the outlook for the global economy remains uncertain due to the worsening of
the situation in the Middle East, as well as the downside risk of the impact of monetary tightening, the economic slowdown in
China, and price increases.
While the business environment surrounding the Group is expected to remain uncertain due to factors such as raw materials
and energy price trends, rising labor costs, and the “2024 problem” in Japan’s logistics industry, we will continue working tosteadily leverage the recovery in automobile production, optimize sales pricing notably through a response to rising labor costs,
and accumulate profits.
We have revised our consolidated earnings forecast for the full fiscal year ending March 31, 2024 (from April 1, 2023 to March
31, 2024), which was announced on May 10, 2023, taking into consideration our performance in the first half of the fiscal year
and the recent business trends. Net sales are forecast at ¥343,000 million, operating profit at ¥10,000 million, ordinary profit at¥11,000 million and net income attributable to owners of the parent at ¥7,500 million. This decision has been made based on
information available to the Group as of the date of issuance of this release. The actual results may vary from the forecast due tovarious factors that will arise in the future.

- 3 -2. Quarterly Consolidated Financial Statements and Important Notes(1) Quarterly Consolidated Balance Sheets(Millions of yen)
As of March 31, 2023
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade, and contract
assetsMerchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Land
Leased assets
Accumulated depreciation
Leased assets, net
Construction in progress
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Retirement benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets- 4 -As of September 30, 2023

23,74024,59571,67180,15827,2297,849
22,156
5,966(41)
158,573

26,1398,779
22,4007,294(45)
169,32196,988(69,639)
27,349226,532(182,494)
44,037
15,538
1,314
(767)
547
3,114
43,084(41,008)
2,076
92,662

98,655(71,352)
27,302
232,839(187,955)
44,884
15,652
1,715
(820)
895
2,900
44,669(42,356)
2,313
93,948

3,014
3,014

3,206
3,206

27,263
201
643
382
9,661
(81)
38,071
133,748
292,322

34,157205
627
382
10,508(84)
45,797
142,952
312,274(Millions of yen)
As of March 31, 2023
Liabilities
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term borrowings
Current portion of bonds payable
Lease liabilities
Income taxes payable
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term borrowings
Lease liabilities
Deferred tax liabilities
Provision for corporate officers' retirement benefits
Provision for share awards for directors (and otherofficers)
Provision for retirement benefits for directors (andother officers)
Reserve for repairs
Retirement benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets- 5 -As of September 30, 2023

36,097
18,372
17,305
7,000
122
871
15,52595,29534,345
24,77016,40412,000184
1,556
16,584
105,846

30,00029,282
213
3,890
150

30,00026,429
449
6,031
186

11

51

11

13

441
9,894
267
1,438
75,602
170,897

304
9,908
266
1,436
75,077
180,924

20,98318,606
67,518(2,503)
104,604

20,98318,606
69,344(2,501)
106,433

9,693

14,638

(4)
5,064
908
15,661
1,159
121,425
292,322

51
8,038
904
23,633
1,282
131,349
312,274(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Income(For the Six-month Period)(Millions of yen)Six months ended
September 30, 2022
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Share of profit of entities accounted for using equity
methodOther
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on sale of non-current assets
Loss on retirement of non-current assets
Business structural reform expenses
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent- 6 -Six months ended
September 30, 2023

156,109
135,494
20,615
19,074
1,540

165,938
144,555
21,382
17,397
3,985

58
368
926

84
414
700

64

214

362
1,780

175
1,590

339
186
525
2,794

449
237
686
4,888

10
55
65

179
0
179

3
179
76
258
2,601
465
2,136
53
2,082

27
75
－
102
4,964
1,531
3,433
52
3,381

Quarterly Consolidated Statements of Comprehensive Income(For the Six-month Period)(Millions of yen)Six months ended
September 30, 2022
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests- 7 -Six months ended
September 30, 2023
2,136

3,433

(1,477)
5
4,355
5

4,888
56
2,747
(3)

855

395

3,744
5,881

8,084
11,517

5,690

11,353

191

164

(3) Notes Regarding Quarterly Consolidated Financial Results(Note related to going-concern assumption)
Not applicable.
(Note on significant changes in the amount of shareholders’ equity)
Not applicable.
(Application of special accounting methods for presenting quarterly consolidated financial statements)
Tax expenses were calculated by multiplying the rationally estimated effective tax rate after applying tax effect accounting to
profit before income taxes for the consolidated fiscal year, which includes the current first quarter under review, by profit before
income taxes for the second quarter.

- 8 -