Management’sDiscussion and Analysis
Analyses and studies of the Mabuchi Group’s performance and financial position are,in principle, based on the consolidated financial statements.

Operating Results
income of 17,544 million yen (a 17.4% decrease year on year).
Profit before income taxes declined 31.2% year on year, to20,179 million yen, in the absence of the one-time gain on salesof fixed assets related to real estate sales at the Company’s wholly
owned subsidiary Mabuchi Industry Co., Ltd. (Hong KongMabuchi) recorded in the previous year. Profit attributable toowners of parent was 14,234 million yen (a 37.9% decrease yearon year).

Given the global economic slowdown, consolidated net sales forfiscal 2019 were 131,807 million yen (a 7.9% decrease from theprevious year), while motor sales, which constitute the majority of
net sales, were 131,799 million yen (a 7.9% decrease year on year).
Although operating income was boosted by improvements in sales
prices and the product mix and movements in market prices forcommodities including copper and steel materials, the yen’s
appreciation, lower sales volume, and higher costs resulted in operating

Overview of Financial Position
Assets, Liabilities and Net Assets

Total net assets increased 718 million yen from the end of theprevious fiscal year, to 245,172 million yen. Retained earnings
increased 4,380 million yen, net unrealized holding gains or losses
on securities increased 1,436 million yen, foreign currency translation
adjustments decreased 2,703 million yen, and treasury stock, which
is deducted from net assets, increased 2,614 million yen.

Total assets as of December 31, 2019, were 268,244 million yen,a 1,194 million yen increase from December 31, 2018. Majorchanges included a 6,478 million yen increase in property, plantand equipment associated with capital investment including forthe establishment of a new production base, a 1,772 million yen
increase in investment securities, a 2,697 million yen decrease in
cash and bank deposits, a 1,996 million yen decrease in tradenotes and accounts receivable, and a 1,828 million yen decrease
in inventories.
Total liabilities stood at 23,071 million yen, for a 476 million
yen increase from the previous fiscal year-end. Major changes
included a 1,322 million yen increase in deferred tax liabilitiesnon-current and a 1,102 million yen decrease in other current
liabilities.

Total Assets

Net cash provided by operating activities amounted to 25,830
million yen, an increase of 4,850 million yen from the previous
fiscal year. Although profit before income taxes decreased 9,143
million yen, gain on disposal of fixed assets decreased 5,377
million yen, increases and decreases in inventories resulted in aturnaround from the previous year’s 4,710 million yen net increase(cash outflow) to a 1,033 million yen net decrease (cash inflow) inLiabilities(Millions of yen)

256,196

Cash Flows

Net Assets(Millions of yen)

258,387

269,318

267,050

268,244(Millions of yen)

25,47027,13822,950

2015

11

2016

2017

MABUCHI MOTOR CO., LTD.

2018

2019

2015

2016

2017

22,59523,071

233,245

232,917242,179

244,454245,172

2018

2019

2015

2016

2017

2018

2019

Annual Report 2019fiscal 2019, and income taxes paid decreased 2,178 million yen.
Net cash used in investing activities amounted to 15,246
million yen, an increase in cash used of 2,510 million yen fromthe previous fiscal year. This was mainly because proceeds fromsales of fixed assets decreased 5,951 million yen.
Net cash used in financing activities amounted to 12,132

million yen, an increase in cash used of 1,062 million yen fromthe previous fiscal year. The main item was a 1,660 million yen
increase in cash dividends paid.
As a result, the balance of cash and cash equivalents
amounted to 110,863 million yen, a decrease of 2,697 million
yen from the end of the previous fiscal year.

The indicators have been calculated with the following
formulae, and are based on figures in the consolidated
financial statements:•	Shareholders’ equity ratio = Shareholders’ equity / Total
assets•	Shareholders’ equity ratio based on market value = Total
market value of shares / Total assets
The total market value of shares has been calculated with thefollowing formula:
Closing stock price at the end of the period × Number ofshares outstanding at the end of the period (minus treasury
stock)Since the Company does not bear substantial interest-bearing
liabilities and relevant interest to be paid, the ratio of interestbearing liabilities to cash flows and interest coverage ratio areomitted.

Outlook for Fiscal 2020degree to which markets will contract and how much time they
will need to recover.
Due to this situation it is extremely difficult to make anaccurate and rational results forecast because of the many
uncertainties that may affect business performance. Therefore,
the consolidated results forecast for the fiscal year ending
December 31, 2020, is undecided.
The impact of this virus infection on the Group's businessperformance is currently being estimated. We will disclose
consolidated results forecast as soon as the status of Group
companies in each country is confirmed and it becomes possible
to calculate them accurately and rationally. In the event of
extremely large changes in results forecast, the dividend forecast
will be reevaluated as appropriate, and the result promptlyannounced.

The consolidated results forecast for the fiscal year ending
December 31, 2020 is undecided at the time of this writing.
The global economy is expected to undergo a major
contraction in all regions from a significant stagnation ofeconomic activity due to the global spread of the newcoronavirus. At this time, there are almost no regions where thetiming of infections being brought under control can be forecast.
Estimating the extent of the slowdown in economic activity or
how much time will be required for a recovery is also extremelydifficult.
With regard to markets related to the Mabuchi Group’s
products, we are forecasting large declines for both theautomotive products market and the consumer and industrial
products market on continued weakness in markets around theworld. It is also extremely difficult at this time to estimate theNet Sales/Gross Profit Ratio(Millions of yen)

32.8

30.4
143,143

140,69932.2
146,925

Profit attributable to owners of parent/ROE(Millions of yen)

31.0
143,116

31.1

8.8

8.0

8.6

9.4

(Millions of yen)
17,91522,925
131,807

Capital Expenditures/Depreciation and Amortization

20,5985.8

20,303

18,546

12,844
11,236

14,234

2015

2016

2017

Gross profit ratio (%)

2018

2019

16,332

16,1872015

2016

2017

ROE (%)For details, please refer to the business & other risks section on our corporate website:

2018

2019

6,386

6,016

2015

2016

Capital Expenditures

7,143

7,652

2017

2018

8,264

2019

Depreciation and Amortization

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