Creating for the Future

SWCC Group
Supplementary Material for the Second Quarter of the Fiscal Year Ending March 2023
November 4, 2022

SWCC SHOWA HOLDINGS CO., LTD.（TSE PRIME: 5805）

FY2022 Q2
Businessenvironment

Net sales

Operatingincome

Overview of Financial Results
Socioeconomic activities picked up with the increase in COVID-19 vaccination rate, but the yen
depreciated significantly amid soaring raw material and energy prices due to the prolonged situation in
Russia and Ukraine and other factors, as well as continued disruptions in the global supply chain.
Demand for automobile-related products continues to decline due to a shortage of semiconductors.
In the electric wire industry, overall demand for electric wire was flat YoY.
Average domestic copper prices rose YoY.

Overall sales increased YoY due to higher copper prices, despite a decrease in copper shipments.
【Status by Major Business Field (YoY)】
Electric power infrastructure: We have captured stable demand while expanding the manufacturing capacity ofelectric power equipment.
Automobiles: Demand for high-performance products is sluggish due to the impact of automobile production
cutbacks that have continued since last year.
Industrial Devices: The supply chain disruption was resolved, but its impact on operations in China and Vietnam
remain in part.

Profits down YoY. Despite our efforts to respond to soaring material prices, delays in the start-up of someof its domestic production bases, continued cutbacks in automobile production, and supply chain
disruptions impacted operations in China and Vietnam.

2

Key Points of the Financial Results for Q2 FY2022
Q2 YoY Change

Q2 Progress rate

Sales increased but profits decreased YoY due tohigher copper prices, despite a decrease in copper
shipments.

Net sales(Unit: 100 million yen)

947

FY2021

Operating income

Up8.0%

1,023

FY2022

Both net sales and operating income were on par with
the normal year.

(Unit: 100million yen)

Full-year
Plan

FY18-21
Avg.
progressrate

Net sales

2,170

47.7%

47.1%

Operatingincome

103

41.4%

41.8%

1,150 yen／kg

ーーDown14.0%

50FY202143

FY2022

Copperprices（Planning assumption）

Q2
Progressrate

3Q2 Consolidated Statements of Income(Unit: 100 millionyen)

FY2021Q2 Actual

FY2022Q2 Actual

FY2022Full-year plan

Progressrate%YoY %Net sales

947

1,023

2,1708.0

47.1

Operatingincome5043103

▲14.0

41.8

Operatingincome margin(%)

5.3

4.2

4.7

--Ordinary
income

51

44103

▲14.6

42.3

Net income
attributable toowners of parent

323790※

17.1

41.3

*The above figures reflect revised business forecasts as of September 22, 2022.

4

Q2: Change Factors for Net sales and Operating income (YoY)
Change factors for net sales

1060億円+ ¥9.0 billion

1040億円Energy andInfrastructure
Business

1020億円
1000億円
980億円
960億円
940億円
920億円
900億円

FY2021
Q2¥94.7billion+ ¥0.4 billion

Effect of rise incopper prices- ¥4.2 billion+ ¥2.1 billion+ ¥0.2 billion

Electronic Communication
Equipment
and Industrial
anddevices Business
Components Foreign exchange
Business
impact: 1.6 billion yen

FY2022Q2Others¥102.2billion

Change factors for operating income
55億円
50億円

FY2021
Q245億円
40億円
35億円
30億円
25億円

¥5.0billion- ¥0.6 billion

Decrease inprofit
increase dueto copper
price impact- ¥1.3 billion+ ¥1.1 billion+ ¥0.2 billion
Structural reforms- ¥0.1 billion
Price hikes in
Decrease in shipments Passing increased
raw materials, due to automobile cost on selling prices
etc.
production cutback, etc. and cost reduction

FY2022Q2¥4.3billion【Change factors】
1. Net sales
Increased mainly by passing cost
increases due to higher copper prices on
selling prices in a timely manner.
Foreign exchange effects include about
1.6 billion yen in the Communication andIndustrial Devices Business.
2. Operating income
Decreased due to delays in passing oncost increases for some products and adecrease in sales due to reduced
automobile production in the Electrical
Equipment and Components Business.
Foreign exchange impact was minimal,adding 0.04 billion yen.
【 Future Initiatives 】
In response to the downward pressure
on incomes from soaring raw material
and other prices, we’ll cover them mainly
by measures to pass on higher sales
prices, reduce costs, and promote
structural reforms.

5

Revision to Full-year Plan by Segment
Due to changes in the external environment and other factors since the beginning of the plan, we have revised the targets for eachsegment, while the company-wide full-year targets remain unchanged. The delay in Q1 operating income growth in the Communication
and Industrial Devices Business is expected to be covered by the other segments' performance. We will strengthen measures for thesecond half to achieve targets.
(Unit: 100 million yen)

Net sales

Energy and Infrastructure
Business

Operating income
Operating income
margin (%)

Net sales

Electronic Equipment andComponents Business

Operating income
Operating income
margin (%)

Net sales

Communication andIndustrial Devices Business

Operating income
Operating income
margin (%)

FY2022Full-year plan
(Before revision)

FY2022Full-year plan
(After revision)

1,095
68
6.2

1,12572
6.4

2.75.9-

47.9
45.0-

715
16
2.2643
18
2.8

▲10.1
12.5-

46.5
58.6-

295
25
8.5

345
19
5.5

16.9
▲24.0-

47.5
24.4
-

Change％Progress rate％6

Q2 Results by Segment and Full-year
Plan
1,000
1,100Construction
Seismic isolation/
OthersEnergy and Infrastructure Business

1,100600(Unit: 100 million yen)
500

66%

69%

3730500
400

777

26%
8%

12840

FY2021 Q225%
5%13710029FY2022 Q20

Electronic Equipment andComponents Business8070400(Unit: 100 million yen)

30

26%
5%

290
59

20 Full-year
plan

Operating income
6.2%
6.0%
6.4%
marginCopper price impact: Net sales up by 4.1 billion yen.
Both sales and profits increased YoY due to construction-related sales
price review, profit improvement measures and stable demand forelectric power infrastructure.
We have revised our full-year plan upward as we expect firm demandfor both construction-related and electric power infrastructure in thesecond half of the year.

2953005040200
30300
200

General-purpose products

6032600

30326

1,12572900
800

200
100

1,000 40700 69%400300539493

High-performance products
oxygen free copper

Electric power infrastructure
Operating income

20100
100053%

10%
37%

299

38%
9%

113
26

FY2021 Q2Operating income
margin

800
700
20500

54%

160

70

Communication cable
Precision devices

609%

563001050200 (Unit: 100 million yen)
40

54%

10000
3.5%

Full-year
plan

2.8%

Copper price impact: Net sales up by 4.6 billion yen.
Sales increased and profits decreased YoY as sales for heavy electricmachinery were firm, but sales of high-performance products for theautomobile industry were affected by the automobile production cutbacks.
Although the impact of production cutbacks will continue in the second halfof the fiscal year, we have revised our full-year operating income
forecast upward by focusing on profitability in the heavy electricmachinery and other sectors.

100164

139

30
48%

300
250

7344%

21%

4429

FY2021 Q2Operating income
margin44%

18191614151

121055534%

34%

36

FY2022 Q2
6.3%

8116

610045022%

345

200
15031%

06720350 10910020387

Wire harness
Operating income

Communication andIndustrial Devices Business 400

38%

11FY2022 Q2
4.7%

64318243400

20029109

Operating income

600

14158

Other high-performance
products
900

80

0278
23%

0

Full-year
plan

2.8%

5.5%

Copper price impact: Net sales up by 400 million yen.
Sales increased but profits decreased YoY due to lower profitability
resulting from delayed start-up of the communication cable restructuring
and delays in price review.
While second half performance is expected to proceed as planned, we
have revised our full-year plan downward due to the significant impactof the first half.

70

Q2 Balance Sheet (Comparison with the previous fiscal year-end)(Unit: 100 million yen)
Total assets
Trade receivables
Inventories
Current assets
Total liabilities
Trade payables
Interest-bearing debt
Total net assets
Shareholders equity
Shareholders equity
ratio (%)
DE ratio (％)

March 31,
2022

1,474
527
260
587

884
267
392

589

September 30,
2022

Change

1,545

71

531
280
613

938

4192654258
454▲962607

18583
39.5

599
38.816▲0.767.2

75.88.6【Fixed assets】

Increased due to various capital
expenditures and higher foreign exchange
rates for fixed assets at overseas
subsidiaries.
In addition, the Company contributed 2.1
billion yen in special premiums to thepension assets of the retirement plan.

【Interest-bearing debt】

Increase in working capital due to soaring
raw material prices and soaring copper
prices.

【Shareholders' equity ratio】

Despite an increase in shareholders' equity,
the equity ratio decreased by 0.7% from theend of the previous fiscal year due to anincrease in total assets.

【DE ratio】

Shareholders' equity increased, but interestbearing debt also increased, resulting in an
8.6% increase from the end of the previous
fiscal year.

8Q2 Cash Flow Results and Full-Year Capital Expenditure Plan
Consolidated Cash Flow
Operating CF
Investment CF
Financial CF
Cash and cash equivalents at end of period(Unit: 100 million yen)

50

38

40

Capital Expenditure Plan for FY2022
Reduction ofenvironmental impact, etc.
R&D

407%

3015%

20Rationalization and ICTenhancement

100△ 10△ 26FY2022 Q2・Operating CF was negative due to an increase in working capital resulting
from an increase in inventories, etc.
・Investment CF was negative due to the acquisition of property, plant, andequipment
・Financial CF was positive due to an increase in borrowings

Production capacity expansion

28%
FY2022

Capital Expenditure Plan

6.7 billion yen△ 10△ 20
△ 30

7%

43%

Reorganization and strengthening ofproduction bases, facility renewal

Energy and Infrastructure Business： 2.5 billion yen
Communication and Industrial Devices Business : 1.0 billion yen
Electronic Equipment and Components Business：1.1 billion yen
Other investments, such as base strengthening, system
investments, etc. ： 2.1 billion yen

9Forward-looking statements in this document are based on information available at thetime of publication and contain potential risks and uncertainties.
Therefore, actual results may differ materially from those projected in the forward-looking
statements as a result of various factors.

Creating for the Future

Factors that could influence actual results include economic conditions, demand trends,
raw material prices, and exchange rate fluctuations, as well as other items not limited tothe above.
Contact
SWCC SHOWA HOLDINGS CO., LTD.
STRATEGY SECTION,BUSINESS STRATEGY PLANNING DEPT.
TEL:044-223-0520
E-mail：kouho@hd.swcc.co.jp

SWCC SHOWA HOLDINGS CO., LTD. (TSE Prime: 5805)