MORITO CO.,LTD
1st section of TSE : 9837

Presentation Materials

for the Second Quarter of Fiscal Year Ended
November 30, 2021 Financial Results

July 2021

1.

FY2021.11 2Q Financial Results

2.

FY2021.11 2Q Business Overview

3.

Business Topics

4.

Shareholder Returns

1FY2021 2Q

Progress & Highlights

・Impacts of closures and adjusting inventories indepartment stores and mass retailers caused by COVID-19.
・Impact of soaring raw material price such as copper tomanufacture our main products such as eyelets and press
fasteners and reducing production by automakers due tosemiconductor shortage.

・Sales of products related to activities that can be enjoyedoutdoors and new lifestyle such as masks increased.
・Compared to 2020FY 2Q, operating income increased by87％, and net income increased by 245％.
2FY2021 2Q Summary of Financial Results（Million JPY）

2020 2Q

2021 2Q

21,1985,497

21,225
5,491

25.9%

25.9%

5,084

4,715

Cost ratio

24.0%

22.2%

Operating income

412775

Operating income
ratio

1.9%

3.7%

Ordinary income

401885

Ordinary income
ratio

1.9%

4.2%

Net income154533

Net income ratio

0.7%

2.5%

Net sales
Gross profit
Gross profit ratio

Cost

3

Increase/Decrease

Y/Y+27-6+0.1%-0.1%

-369

-7.3%

+363

+87.9%+484+120.4%+379+245.6%

2021FY 2Q

Net Sales

Net sales： 21,225 million JPY
Y/Y： +27 million JPY （+0.1%）
Sales were at the same level as 2020FY 2Q due to COVID-19 andsemiconductor shortage.
Japan

14,638 million JPY

Y/Y −326million yen（−2.2%）

21,19821,225

Asia

4,079 million JPY

Y/Y +481 million yen （＋13.4%）

2020

2021

Europe & the U.S. 2,507 million JPY

Y/Y −128 million yen（−4.9%）（million JPY）

42021FY 2Q

Quarterly Financial Trends

Although the impact of COVID-19 is expected to continue, sales
will be concentrated in the second half continuously.
13,00012,00011,00010,000
9,000
8,000
7,000
6,000
5,000
（Million JPY）

1Q

2Q

3Q

2018

4Q

1Q

2Q

3Q

2019
5

4Q

1Q

2Q

3Q

2020

4Q

1Q

2Q

2021

2021FY 2Q Gross Profit
Gross profit： 5,491 million JPY

Y/Y ： −6 million JPY（−0.1%）

Impact of soaring raw material price（Million JPY）
Increase/

2020 2Q 2021 2Q Decrease

5,497

2020

5,491

2021

Y/Y

Net sales

21,19821,225+27+0.1%

Gross profit

5,497

5,491-6-0.1%

Gross profit
Ratio

25.9%

25.9%

5,084

4,715-369-7.3%

412

775+363 +87.9%

401885+484 +120.4%

154533+379 +245.6%

Cost
OperatingincomeOrdinary
incomeNet income

62021FY 2Q Trends in Net Sales &Gross Profit Ratio
Orders are recovering, however, gross profit will be affected bysoaring raw material prices, such as copper.
2Q Total Net Sales

4Q Total Net Sales

Gross Profit Ratio

50,00030.0%

40,00028.0%
Forecast

30,00026.0%

20,00024.0%

10,00022.0%

020.0%（Million JPY）

201320142015

2016

201772018201920202021

2021FY 2Q

Operating Income

Operating income： 775 million JPY Y/Y ： +363 million JPY(+87.9%）
Decrease of cost >Decrease of gross profit（Million JPY）
Increase/

2020 2Q 2021 2Q Decrease

412775Net sales

21,19821,225+27+0.1%

Gross profit

5,497

5,491-6-0.1%

Gross profitratio

25.9%

25.9%

Cost

5,084

4,715-369-7.3%

Cost ratio

24.0%

22.2%

412

775

1.9%

3.7%

401885+484 +120.4%

154533+379 +245.6%

Operatingincome
Operatingincome ratio

2020

2021

Y/Y

Ordinaryincome
Net income

8+363 +87.9%

2021FY 2Q

Ordinary Income

Ordinary Income ： 885 million JPY Y/Y ： +484 million JPY（+120.4%）
Increase in operating income & non-operating income
Decrease of non-operating expenses（Million JPY）
Increase/

2020 2Q 2021 2Q Decrease

4012020885

2021

Y/YNet sales

21,19821,225+27+0.1%

Gross profit

5,497

5,491-6-0.1%

Gross profit
ratio

5,084

4,715-369-7.3%

Cost412775

Cost ratio

1.9%

3.7%

Ordinary
income401885

Ordinary
income ratio

1.9%

4.2%

Net income

154

533

Net income ratio

0.7%

2.5%

9+363 +87.9%+484 +120.4%+379 +245.6%

2021FY 2Q

Net Income

Net Income ： 533 million JPY

Y/Y ： +379 million JPY（+245.6%）

Increase in ordinary income(Million JPY）
Increase/

2020 2Q 2021 2Q Decrease

533

154

Net sales

21,19821,225+27+0.1%

Gross profit

5,497

5,491-6-0.1%

CostOperatingincomeOrdinaryincome

5,084

4,715-369-7.3%

412775+363 +87.9%

401885+484 +120.4%

1.9%

4.2%

1545330.7%

2.5%

Ordinary
income ratio

Net income

2020

2021

Y/Y

Net incomeratio

10+379 +245.6%

2021FY Q2Forecast & Progress（Million JPY）

FY2021 FullYear Forecast

2021FY 2Q
Net sales
Operating income

21,225775

43,0001,300

Operating income ratio

3.7%

3.0%

Ordinary income

885

1,300

Ordinary income ratio

4.2%

3.0%

Net income

533

700

2.5%

1.6%

Net income ratio

2020FY 2Q

2020FY 4Q

40,727856

Operating income ratio

1.9%

2.1%

Ordinary income

401928

Ordinary income ratio

1.9%

2.3%

Net income

154

470

0.7%

1.2%

Net income ratio

1149.4%
59.6%
68.1%

76.1%

Progress

21,198412

Net sales
Operating income

Progress

52.0%
48.1%
43.2%

32.8%

2021FY 2Q

Balance Sheet（Million JPY）

2020 4Q

2020 4Q

2021 2Q

2021 2Q

Liabilities

AssetsCurrent
liabilities

6,927

6,823
(▲ 104)Current
assets25,496

Fixed liabilities

25,320

4,756

4,606
(▲ 150)(▲ 176)

Total liabilities

11,684

11,429(▲ 255)

Net assets

Shareholders’equity

30,51630,918(+402)

Fixed assets

18,201

Other
comprehensive
income19,391

1,441(+866)(+1,190)
Deferred assets

1

Total net assets

043,699

32,01533,282(+1,267)(▲ 1)

Totalassets

2,307

Liabilities andnet assets

44,712(+1,013)43,69944,712(+1,013)Equity ratio 74.3％（2020FY 4Q 73.1％）
122021FY 2Q Quarterly Consolidated Statementsof Cash Flows（Million JPY）

2020FY 2Q

2021FY 2Q

9,442

10,052

Cash flows from operating activities

584

1,489

Cash flows from investing activities

41▲ 738Cash flows from financing activities▲ 927▲ 69628108▲ 273

16232---

9,201

10,214

Cash and cash equivalents at beginning of period

Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash
equivalents
Increase in cash and cash equivalents resulting
from inclusion of subsidiaries in consolidation
Decrease in cash and cash equivalents resulting
from exclusion of subsidiaries from consolidation

Cash and cash equivalents at end of period

13

1.

FY2021.11 2Q Financial Results

2.

FY2021.11 2Q Business Overview

3.

Business Topics

4.

Shareholder Returns

142021FY 2Q

Net Sales by Regions（Million JPY）

AsiaJapan

14,964

Europe& the U.S.

14,638
3,598

2020
Y/Y

2021

−326 million JPY（−2.2%）

4,079

2020
Y/Y

2021

＋481 million JPY（＋13.4%）

15

2,635

2,507

2020

2021

Y/Y

−128 million JPY（−4.9%）

2021FY 2Q

Net Sales by Regions（Japan）

Impacts of COVID-19 have continued, especially in the apparel business, butsales of products related to staying home and outdoor sports.
・ Increase of clothes related to sports andoutdoor activities（Million JPY）10,000
9,000・Decrease of accessories for thick-fabricwear, bag, and shoes

8,0007,000

・Increase of automobile interior components 6,000
5,000

・Increase of products to dollar stores

4,000・Increase of products related to PC such astablet cases and mouse pads
・Increase of products related to surfing andskateboard

3,000
2,000
1,000

・Decrease of products related to snowboard
and safety-related accessories for construction
site160
１Q２Q３Q４Q１Q２Q３Q４Q１Q２Q３Q４Q１Q２Q
201820192020

2021

2021FY 2Q

Net Sales by Regions（Asia）

Although the business mainly in Southeast Asia was affected by thestate of affairs in Myanmar, the transportation business has grown as
the axis in Asia. Moreover, the apparel business has been recovering.
2,500

・Increase of accessories to Europe andthe U.S. apparel manufacturers
in Hong Kong

（Million JPY）

2,000

1,500

・Decrease of accessories to Japaneseapparel manufacturers in Thailand

1,000

・Increase of automobile interior
components to Japanese automobile
manufacturers in China

500

0１Q ２Q ３Q ４Q １Q ２Q ３Q ４Q １Q ２Q ３Q ４Q １Q ２Q
201817201920202021

2021FY 2Q Net Sales by Regions（Europe & the U.S.）
The impact of COVID-19 has continued. However, economic activity
has been restarting and net sales have been recovering since 2020FY3Q.
（Million JPY）
1,800
・Decrease of accessories to apparel
manufacturers

1,500
1,200

・Increase of automobile interior
components to Japanese automobile
manufacturers in Europe

900600・Decrease of automobile interior
components to Japanese automobile
manufacturers in the U.S.

300
0
１Q ２Q ３Q ４Q １Q ２Q ３Q ４Q １Q ２Q ３Q ４Q １Q ２Q
20181820192020

2021

2021FY 2Q

Net Sales by Regions（Quarterly）（Million JPY）

2021FY
１Q

２Q

Total for theComposition
first half

Increase/
Decrease

Y/YJapan

7,347

7,291

14,638

69.0%

-326

-2.2%

Asia

2,083

1,996

4,079

19.2%

+481

+13.4%

Europe&the U.S.

1,198

1,309

2,507

11.8%

-128

-4.9%

Total

10,62910,596

21,225100.0%

+27

+0.1%

Total

Composition

Increase/
Decrease

Y/Y

2020FY
１Q

２Q

Total for the
first half

３Q

４Q

Japan

7,902

7,062

14,964

6,141

7,705

28,81070.7%-4,452-13.4%

Asia

2,026

1,572

3,598

1,660

1,967

7,225

17.7%

+262+3.8%

Europe&the U.S.

1,242

1,393

2,635944

1,112

4,691

11.5%

-1,071-18.6%

Total

11,171

10,027

21,198

8,744

10,78540,727100.0%-5,260-11.4%

19

2021FY 2Q

Sales Composition by Region＜2020 2Q＞

＜2021 2Q＞

Europe &Europe &the U.S.

the U.S.

12%

12%

Asia
17%

Asia
19%

Japan

Japan
69%

71%

20

2021FY 2Q
Business

Sales Composition by Region &＜2020 2Q＞
Asia
Japan

37%

＜2021 2Q＞

Europe&the U.S.

15%

Japan

47%
Asia

18%

7%

PD

Europe&41%

the U.S.

Japan

13%

46%

TR

59%

TR

Asia

Asia

AP20%

3%44%

PDAsia

38%

Japan
57%

AP
44%

36%

Asia

19%
Japan
93%

Europe&Japanthe U.S.

96%

22%
AP：Apparel

22%

PD：Product21

TR: Transportation

Europe&the U.S.

21%

1.

FY2021.11 2Q Financial Results

2.

FY2021.11 2Q Business Overview

3.

Business Topics

4.

Shareholder Returns

22Morito Group Project to Develop Eco-friendly
Products, ”C.O.R.E.”〈Japan Apparel & Product Business〉
We have promoted development apparel accessories made by“REAMIDE” recycled from discarded fishing nets.
We have developed new materials such as tape, rubber, and fabric aswell as plastic parts.
（Examples of products made from “REAMIDE”）

23

Morito Group Project to Develop Eco-friendly
Products, ”C.O.R.E.”〈 Japan Apparel & Product Business 〉“C.O.R.E.” can approach any industry from all perspectives of“dots, lines and plane”.
It has been decided to be adopted by major brands.
（Image to use products of C.O.R.E）

Outerwear

ButtonTent

Storage Bags for Surfboards,etc.

Bag

24

Purse

Plastic Bottle HolderStrap

The Product & Services that Integrate AI and IoTwith Subsidiary Materials & Accessories, “ Mimalook “〈Japan Product Business〉
Launching GPS Watching Service “Mimalook”
It informs the guardian of their children's and elderly's current
location and activity history by carrying it.
This is the first step as ” The Product & Services that Integrate AI
and IoT with Subsidiary Materials & Accessories”, the businessstrategy in the 8th Mid-Term Management Plan.

Official HP
https://mimalook.jp/25

Expand Sales of Products Related toSkateboarding & Surfing〈Japan Product Business〉
Sales of products related to skateboarding & surfing handledby Maneuverline Co., Ltd. have expanded because their sports
can be enjoyed outdoors at a safe social distance and attractedattention as an official event of the Tokyo Olympics.

（Skateboarding Featured Products）
The brand of Maneuverline, “etnies”
collaborated with Popular YouTuber"SHIMON." and “Murasaki Sports” forskateboarding shoes.

26

Expand Sales of Products Related to
Skateboarding & Surfing（ Surfing Featured Products ）Maneuverline Co., Ltd. has started handled “NEILPRYDE” , the brandrelated wind surfing since 2021FY. Moreover, it has been the import agency for“CHANNEL ISLANDS”, the brand that has famous surfers from around theworld and will be expected to increase sales.

27

A New Kind of Outdoor Brand ”POLeR”〈 Japan Product Business 〉
A new kind of outdoor brand ”POLeR” mixed lifestyles such assurfer, skateboarder and snowboarder has been attracted attention
and featured in some magazines because demand for products
related to outdoor increases by COVID-19 pandemic.

Dog outdoor sheet

Dog toyContainer case28

Expand the products for dollar stores〈 Japan Product Business 〉
At discount stores that mainly sell insoles, sales of computerrelated products such as mousepads are increasing. In addition, thehandling of our original brand products such as masks, handicrafts,and beads has begun and has progressed smoothly.
（Examples of our Original Brand Products）

29

Development of BtoC Business “52DESIGN”〈Japan Apparel Business〉
Pop-up stores were held at various department stores and somefamous select shops. Going forward, we will focus on collaboration
with other industries and sales in Asia.

FROM FIRST MUSEEBAL KOBETATRAS CONCEPT STORE Hibiya

Hankyu Umeda

JR Kyoto Isetan30

Development of BtoC Business“Waterproof Material Bag”
〈 Japan Product Business 〉
In addition to the popular waterproof material bag "ZAT", in March 2021
we released a convenient casual waterproof material bag "ZAB" that canbe used for outdoor, and it has been adopted by mass retailers.

31Participation in the Seminar for IndividualInvestors〈Whole Company〉
We participated in the seminar for individual investors held by
Events Co., Ltd. and explained our company, business and future.
We are focusing on Company PR more actively.
（The state of the seminar ）The state of the seminar can be viewed
from the QR code / URL below.

https://youtu.be/99GMRwOfj6g

32

1.

FY2021.11 2Q Financial Results

2.

FY2021.11 2Q Business Overview

3.

Business Topics

4.

Shareholder Returns

33Basic Dividend Policy

Maintain aRealize
dividend on
continuous
Dividend
equity (DOE)
dividend
payout ratio ofof 1.5%
payments
50%more in

relation to profit
attributable to ownersof parent is thestandard※※In a fiscal year with a significant
fluctuation in after-tax profit attributableto owners of parent due to special
factors such as extraordinary income orlosses, the dividend amount will be
determined in consideration of thecorresponding impact.
※From the perspective of striving to further enhance shareholder returns, after considering factors such as theCompany’s earnings and expenditure balance as well as the share price level, the Company will continuously
review the need to flexibly conduct a purchase or retirement of its treasury shares.
34

Trends of Dividend, Dividend Payout Ratio &Basic Dividend Policy since 2017FYDOE
35.0
30.0
25.0

■Annual Ordinary Dividend (JPY)

Listed on 1st TSE
Included 6.0 JPY as
CommemorativeDividend

Commemorative Dividend（JPY）

110 years since
established
Included 1.0 JPY as
Commemorative
Dividend

Maintenance ofDividend payout
ratio of 50%more &DOE1.5％ in
COVID-19 crisis■Net Income（Million JPY）

20.0
15.0
10.0
5.0
0.0

※

2015

2016

2017

2018

2019

2020

2021（Forecast）

Net income（Million JPY）

14.3

11.8

33.0

12.5

14.0

4.7

7.0

Annual dividend per share（JPY)

14.5

17.0

28.0

25.0

26.0

18.0

18.0

Interim dividend per share（JPY）

7.0

8.0

14.0

12.5

13.0

13.25

9.0

Year-end dividend per share(JPY）

7.5

9.0

14.0

12.5

13.0

4.75

9.0Dividend payout ratio（％）

29.3

41.0

23.5

54.7

50.8

104.8

70.4

ＤＯＥ（％）

1.37

1.69

2.42

2.13

2.22

1.53

1.54

※ The dividend payout ratio for the fiscal year ended November 30, 2017 is 23.5% in the table, but based on theordinary dividend of 22 yen excluding the commemorative dividend and the net income attributable to shareholdersof the parent company excluding extraordinary gains and losses, the dividend payout ratio is more than 50%.
35

Disclaimer
This handout has been prepared for only information purposes and made notintended to solicit investment.
Although this handout is made with extreme care, its completeness cannot beguaranteed.
We assume no responsibility whatsoever for any damages resulting from thecontents.
The financial results forecasts and forward-looking in this presentation are judged
by information known as of the day of presentation and contains some potentialrisks and uncertainties.
Therefore, please be aware that the content of the forecast may differ significantly
from actual results, due to various factors such as change of business environment.

Contact
MORITO CO.‚ LTD. General Affairs Dept. IR & Stock Sect.
4-2-4,MINAMI HOMMACHI, CHUO-KU, OSAKA 541-0054 JAPANE-mail：ir@morito.co.jp
36