Summary of Financial Results:
First Half of FY2022

November 8, 2022
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Agenda1. FY2022 Q2 Financial Overview
2. FY2022 Full-year Forecast
3. Mid-term plan forecast

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SummaryQ2Overview• Although there was an impact of reduced automobile
production and increased expanses in 1H,
Nifco achieved OP Margin of 10.3% thanks toan increase in installed value per vehicle and thoroughcontrol of fixed cost

FY2022Full-yearForecast• Exchange rate assumptions have been revised,
but full-year results remain unchanged• Increased expenses and delayed recovery ofautomobile production are expected,
but focus on unit price review• Dividend forecast for this fiscal year
remains unchanged (62 yen/share)

Mid-termPlan•

Maintain quantitative MTP target (FY2024)

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Agenda1. FY2022 Q2 Financial Overview
2. FY2022 Full-year Forecast
3. Mid-term Plan Forecast

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4

1. Financial HighlightsSecured almost double-digit OP margin despite the severe business environment• Net sales remained at high level partly due to yen depreciation• Secured almost double-digit OP margin despite inflation, delayed production recovery, etc.
Remained profitability(Billions of yen)
80.0

75.720.0%

Net sales :Operating margin :

70.0
15.0%
60.0
10.0%
50.0

9.6%

40.0

5.0%

30.0
0.0%
20.0
-5.0%
10.0

22/1Q
22/2Q

3Q

21/1Q

3Q

20/1Q

3Q

19/1Q

3Q

18/1Q

3Q

17/1Q

3Q

16/1Q

3Q

15/1Q

3Q

14/1Q

3Q

13/1Q3Q

12/1Q

3Q

11/1Q

3Q

10/Q1

Q3

09/Q1

Q3-10.0%
08/Q10.0

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2. Overview of FY2022 Q2 Consolidated

Achieved year-on-year increase in revenue and profit• Increase in net sales (yoy +9.3%) and OP (yoy +1.5%) due to yen depreciation, strong
performance of Korean business, etc.
• QoQ, net sales increased (+4.2%), but OP decreased (-7.5%) due to overall cost increase
FY2021

FY2022Q2Q1Q2YoYNet Sales

69.3bn72.6bn75.7bn+9.3%

Operatingprofit

7.2bn

7.9bn

7.3bn

+1.5%

OP margin

10.4%

10.9%

9.6%

-0.8%pts

Net income 1)

5.8bn

8bn

5.8bn

+0.3%

EPS

57.07yen80.22yen

57.90yen+1.4%

FX rates

1USD=JPY107.8
1EUR=JPY129.9

1USD=JPY116.3
1EUR=JPY130.4(JPY)1) Net income is net income attributable to parent company

1USD=JPY123.1 1USD=JPY+15.3
1EUR=JPY134.4 1EUR=JPY+4.5
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3. Overview of FY2022 1H Consolidated

Sales and OP increased yoy. OP margin is solid at 10.3%• Although net sales increased YoY due to yen depreciation and strong business in Korea,
OP decreased due to higher costs caused by inflation (raw material and labor costs, etc.)• However, profit margin remained in double digits
FY2020

FY2021

1H

1H

1H

YoY

Net Sales

107.5bn

139.7bn

148.4bn+6.2%

Operatingprofit

6.5bn

16.1bn15.2bn-5.3%

OP margin

6.0%

11.5%

10.3%

-1.2%pts

Net income 1)

3.1bn

11.9bn13.8bn+16.4%

EPS

30.85yen

117.19yen

138.10yen+17.8%

FX rates

1USD=JPY108.2
1EUR=JPY119.3

1USD=JPY107.8
1EUR=JPY129.9

1USD=JPY123.1 1USD=-JPY+15.3
1EUR=JPY134.4 1EUR=JPY+4.5(JPY)1) Net income is net income attributable to parent company

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4. FY2022 1H Consolidated Operating Profit (YoY)1)

Operating Profit Analysis• Increase in net sales due to yen depreciation, strong performance in Korea, and increase ininstalled value per a vehicle led to increase in operating profit• Fixed costs such as labor costs increased due to production recovery, but are appropriately
controlled within the budget(JPY)-0.7bn+4.1bn-4.3bn16.1bnOperating profit(FY2021 1H)

15.2bnSalesfactors1) Overseas: January - June, Japan: April - September

Marginal profit
factors

Fixed costfactors

Operating profit(FY2022 1H)

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5. FY2022 1H by Segment (Net Sales)1)

Achieved increase in net sales in all regions except Europe• China was impacted by lockdown, but the subsequent recovery was strong, resulting in a
YoY sales increase• European market is uncertain and sales declined slightly YoY.
FY2021 (1H)

FY2022 (1H)

YoY

Consolidated

139.7bn

148.4bn+6.2%

Plastics

126.1bn

133.3bn

+5.6%

Japan

35.2bn35.7bn+1.4%

NorthAmerica

30.1bn32.7bn+8.8%

Solid demand

Europe18.7bn18.4bn-1.4%

Uncertainty in terms of demandAsia

42.2bn46.4bn+10.1%

Remained strong in Korea businessChina

13.6bn14.9bn+9.6%

Strong recovery in demand
after lockdown

Bed13.5bn15.1bn+11.6%

Remained strong in bed business

Japan

7.5bn

8.3bn

+10.7%

Asia6bn

6.8bn+12.6%(JPY)

1) Overseas: January - June, Japan: April - September

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6. FY2022 1H by Segment (Operating Profit)1)

Strong in Asia and bed, but OP decreased YoY due to slow recovery in Europe and US• Despite cost hikes, Asia and bed are well-managed, resulting higher OP with high profitability• Profitability in Europe and US declined YoY due to a slow recovery,and profitability remained low.
FY2021 (1H)

FY2022 (1H)

YoY

Consolidated

16.1bn15.2bn(11.5%)(10.3%)-5.3%

Plastics

16.2bn15.1bn(12.9%)(11.4%)

Japan

5.7bn

5.3bn

(16.3%)(14.8%)

North
America

1.2bn

0.9bn

(4.0%)(2.8%)

Europe

1.4bn

0.6bn

(7.7%)(3.4%)

Asia

7.9bn

8.3bn

(18.7%)(17.9%)

2.2bn

2.5bn

(16.5%)(16.6%)

2.4bn

2.5bn

(17.6%)(16.4%)

1.1bn

1.1bn

(14.1%)(13.6%)

1.3bn

1.3bn

(21.8%)(19.9%)(JPY)

ChinaBedJapan
Asia1) Overseas: January - June, Japan: April - September

Note-6.7%-7.6%-22.0%

Quality issues at a plant-56.0%

Increase in electricity and otherenergy costs

+5.4%
+9.9%
+4.3%

Strong recovery after lockdown
and OP margin maintained
Maintained high profitability despite
the impact of cost increases

+6.5%
+2.4%
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7. Customer base (average installed value per vehicle and customer mix)

Installed value per vehicle increased and customer diversification progressed• Nifco has a wide range of customers including Japanese, Korean and European OEMs,and the average installed value keeps increasing in FY2022 1H• MP margin is in the upper 40% range, but recently decreased due to material cost increase
6%
10%

Other non-JapaneseOEMs
German OEM

27%

Hyundai

12%

Other Japanese OEM

14%

12%
9%

Honda

27%

25%

Toyota

FY2011

FY2022 1H(yen/units)

9%
20%

6,917

Averageinstalledvalue
pervehicle(Japan)

5,739
5,175
4,608

5,000

Customermix(global)

4,058
3,000

18%

3,509

FY1997FY2000FY2003FY2006FY2009FY2012FY2015FY2018FY2021
FY2022 1H

12%Nissan50.6%
49.8%
49.1%
49.1%
49.1%
48.8%
47.9%
47.8%
47.6%
47.6% 47.2%
47.5%
46.9%
46.9%
49.5%
49.2%
49.6%
48.9%
49.2%
48.7%
49.5%
47.7%
47.8%
48.1%
47.2%
47.0%
48.2%

Marginal
profitratio'09/2Q'10/2Q'11/2Q'12/2Q'13/2Q'14/2Q'15/2Q'16/2Q'17/2Q'18/2Q'19/2Q'20/2Q'21/2QAll Rights Reserved. Copyright © 2021. Nifco Inc.

22/2Q

11

Agenda1. FY2022 Q2 Financial Overview
2. FY2022 Full-year Forecast
3. Mid-term Plan ForecastAll Rights Reserved. Copyright © 2021. Nifco Inc.

12

8. FY2022 Forecast (Outlook) 1

Revised Foreign Exchange Rate Assumptions••

Revised FY2022 foreign exchange rate considering exchange rate trends(128yen/USD, 136 yen/EUR)
Trends in production recovery and progress in price negotiations are considered
Previous (August)
Period covered

Current

Assumptions Period coveredAssumptions• Watch for impact of supply chain
issues on production recovery

Demand2022/7~2023/3

Japan

2022/10~2023/3

Supply• Inflation is expected to continue

Demand• Watch for impact of supply chainissues on production recovery

2022/4~2022/12

Overseas2022/7~2022/12

SupplyFX Rate• Inflation is expected to continue

123 yen/USD
134 yen/EUR

128yen/USD • +5yen/USD
136yen/EUR • +2yen/EUR

1 FY2022 is between April 2022 to March 2023 for Japan and Jan 2022 to Dec 2022 for overseas

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Nifco
Inc.Inc.
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2018.
Nifco

139. FY2022 Forecast

No change in forecasts for FY2022• Although FY2022 foreign exchange assumptions have been revised, full-year forecasts
remain unchanged (1USD=JPY128, 1EUR=JPY136)
FY2021

FY2022

1H

1HNet Sales

139.7bn

148.4bn

305bn

48.7%

Operatingprofit16.1bn15.2bn31.5bn48.3%

OP Margin

11.5%

10.2%

10.3%

ｰRecurring
Profit17bn

20.3bn30.5bn66.7%

Net Income1)

11.9bn13.8bn

20bn

69.2%

EPS2)

117.19yen

138.10yen

199.66yen

69.1%

(JPY)

1) Net income is net income attributable to parent company, 2) Net Income per a share

Full-Year Forecasts Achievement rate

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1410. FY2022 Forecast (risk and actions)

Solid customer base and prompt response to supply issues and cost increases••

Thoroughly implement measures such as fixed cost management to deal withuncertainties in the business environment, including automobile production trends andraw material costs.
Risk mitigation in consolidated group through strong bed business
Risk factors

DemandSupply• Prolonged adjustment of automobile
production due to supply chainproblems• Response to increased production
at the time of recovery inautomobile production• Tight supply and demand formarine logistics• Soaring raw material costsCost• Increase in costs (labor costs, energycosts, etc.)

Situation / Response• Risk mitigation through diverse
customer mix(Sales to Korean OEM is steady,bed business is steady)• Securing production capacity
for increased production• Optimal global production• Promotion of price optimization
initiatives• Thorough cost reduction andfixed cost management

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11. CAPEX and Depreciation

CAPEX was restrained vs the plan, but remained at the same level as FY2021 1H• Due to sluggish performance in Europe and US, operating CF and free CF decreased yoy• Continued emphasis on cashflow-oriented management
FY2021(1H)

FY2022(1H)

ChangePlan (FY2022)

CAPEX

4.1bn

4bn

-0.1bn13.1bnDepreciation

6.2bn

6.6bn

+0.4bn

13bn

R&D

1.3bn

1.8bn

+0.5bn2.8bn

Operating CF

18.9bn15.6bn-3.3bn38.4bnInvestment CF-5.4bn-7.4bn-2bn-13.1bn

Free CF

13.5bn8.2bn-5.3bn25.3bnFinancial CF-7.3bn-5bn-2.3bn-14.7bn

Cash equivalentbalance

104.2bn

120.5bn+16.3bn

119.9bn(JPY)

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12. Shareholder returns

Total payout ratio exceeding 30% through dividends and share buybacks••

We commit dividend payout ratio of 30% and pays stable dividends.
In addition, in recent years, we have achieved continuous total payout ratio which is overdividend payout ration by flexible share buybacks
FY2018FY2019FY2020

FY2021

FY2022eDividend(full year)62
yen/share62
yen/share62
yen/share53
yen/share62
yen/share62yen/share

Share
buy-back

530k
shares(4bn yen)

1mn
790k
710k
1.38mnsharessharessharesshares
(2.8bn yen) (1.4bn yen) (1.4bn yen) (4.8bn yen)

Sshareholder return

FY2017

Target(payout ratio)

30%
Dividends

49%
Results

30%

30%

30%

30%

N.A.

30%

: Share buybacks

45%

43%

19%

14%

8%

30%

31%

35%

37%
8%
29%

48%
21%
27%

※*Nifco conducted a 2-for-1 stock split of common stock on April 1, 2018. "Dividends" are presented assuming that the stock split was conducted at the beginning of 2017.
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Agenda1. FY2022 Q2 Financial Overview
2. FY2022 Full-year Forecast
3. Mid-term Plan Forecast

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18

13. Mid-term management plan

Maintain quantitative mid-term plan targets in FY2023••Sales activities of automotive parts for FY2023 models progressed as expected
In the bed business, strong demand for high quality mattresses in China and Southeast
Asia
Outlook for FY2022 and beyond

Mid-term targets (FY2024)(JPY)

Normalization ofautomobile production
Automobile

Continued increase in demand
for lightweight, safety-related
plastic products
Supply chain problems
caused by Covid, etc.
Strong demand in China
and Southeast Asia

Bed

Sales

330bn

Operatingprofit38bn

OPmargin11.5%

Net income

26.5bnIncreased demand forhigh quality mattresses
Trend of consumption fromstaying at home due to Covid,
trends for hotel demand

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Forward‐looking statements or projections included in this document, including earnings projections,are based on currently available information and certain premises that are judged to be rational at thetime of this writing. Actual results may differ greatly from the forecast figures depending on variousfactors.

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