Financial Status

Summary of Financial Result for Year to March 2023 May 19, 2022 1 Highlight of the Financial Result (Unit: Hundred million yen) March 2021 March 2022 March 2023 Result Result Result Change from previous period Sales 927 850 854 +4 Operating profit 57 53 51 -2 Ordinary profit 64 65 59 -6 Current net income attributable to owners of parent company 49 45 40 -4 The amount of sales remained at a slight increase due to the effect of the difficulty in procuring semiconductor parts. The operating profit, ordinary profit, and net income attributable to owners of parent company resulted in a decline due to the low capacity utilization of the production line and the increase of the development investment cost. 2  Transport infrastructure business: Decline of income from the previous period due to the effect of the deferral of sales and so on.  ICT solution business: Increase of income due to the increase of AFC projects including the handling of fare revision. By Segment (1) Sales/Segment Profit (Unit: Hundred million yen) March 2021 March 2022 March 2023 Change from previous period Sales Segment profit Sales Segment profit Sales Segment profit Sales Segment profit Transport infrastructure business 511 71 488 52 470 51 -17 -1 ICT solution business 415 16 362 33 384 33 +22 +0 Whole company expenses - -30 - -31 - -33 - -1 Total 927 57 850 53 854 51 +4 -2 3 By Segment: (2) Orders Received/Outstanding Orders (Unit: Hundred million yen) March 2022 March 2023 Change from previous period Orders received Sales Outstanding orders Orders received Sales Outstanding orders Orders received Sales Outstanding orders Railway signal 372 425 396 541 394 543 +169 -30 +147 Smart mobility 67 62 8 75 75 7 +7 +12 -1 Transport infrastructure business 440 488 404 616 470 550 +176 -17 +146 AFC 281 287 160 293 311 142 +12 +24 -18 Smart city 75 74 10 79 72 18 +4 -2 ＋ 8 ICT solution business 356 362 171 373 384 161 +17 ＋ 22 -10 Total 797 850 575 990 854 711 +193 +4 +136 Railway signal スマートモビリティ AFC Smart city Smart mobility The increase of the orders received is due to the effect of the overseas business. The income resulted in a decline due to the deferral of sales. Orders received and income increased as boosted by traffic control system projects, etc. The income decreased due to the decrease of sales of 3D range image sensors, security systems, etc. The increase of the orders received is due to the effect of the overseas business. The income increased as it was boosted by the projects such as handling of domestic fare revision. 4 By Segment (3) Sales of Overseas Business (Unit: Hundred million yen) March 2022 March 2023 Comparison with the previous period Orders received Sales Outstanding orders Orders received Sales Outstanding orders Orders received Sales Outstanding orders Overseas railway signal 37 65 158 242 62 339 +205 -3 +180 Overseas AFC 0 10 18 41 11 48 +40 +0 +29 Overseas total 37 76 177 283 73 387 +246 -2 +210 The outstanding orders were the highest ever due to the large projects of orders received overseas. Increase in orders received was mainly driven by Manila Subway in the Philippines and an increase in sales by Ahmedabad Metro in India. Increase in orders received was mainly driven by Cairo Metro Line No. 4 in Egypt and an increase in sales by Dhaka Metro MRT Line-6 in Bangladesh. Whole overseas Overseas railway signals Overseas AFC 5 Financial Status (Unit: Hundred million yen) March 2022 March 2023 Result Change from previous period Total assets 1,340 1,460 +119 Trade receivables/inventory total 782 856 +74 Interest bearing liabilities 117 175 +57 Equity capital 867 893 +26 Trade receivables/ inventory ratio 58.3% 58.6% +0.3pt Interest bearing liability ratio 8.8% 12.0% +3.2pt Equity capital ratio 64.7% 61.2% -3.5pt 6 Cashflow Statements March 2022 132 +20 -23 -67 +0 63 63 +17 -35 +39 -0 83 Opening balance Business activity Investment activity Financial activity Translation difference Final balance Opening balance Business activity Investment activity Financial activity Translation difference Final balance March 2023 (Unit: Hundred million yen) (Unit: Hundred million yen) 7 Plan for Year to March 2024 65 59 68 March 2022 March 2023 March 2024 Sales 850 854 950 March 2022 March 2023 March 2024 Operating profit Ordinary profit Current net income attributable to owners of parent company 45 40 47 March 2022 March 2023 March 2024 (Plan) (Plan) (Plan) (Plan) (Unit: Hundred million yen) March 2022 March 2023 March 2024 Plan Change from previous period Sales 850 854 950 ＋ 95 Operating profit 53 51 60 +8 Ordinary profit 65 59 68 +8 Current net income attributable to owners of parent company 45 40 47 +6 Plan 53 51 60 March 2022 March 2023 March 2024 8 Orders Received/Sales Trend (Railway Signal) Plan Railway signal business 425 394 450 0 200 400 600 March 2022 March 2023 March 2024 Orders received Sales (Hundred million yen) (Hundred million yen) 372 541 455 0 200 400 600 March 2022 March 2023 March 2024 Focus efforts on facility streamlining such as automatic operation, remote monitoring, and SPARCS (wireless train control system) and labor saving as a solution to support customers’ structural reform in society ‘with COVID’. Address the development of products that meet or help resolve the social issues including decreasing labor population, natural disasters, and decarbonization. (Plan) (Plan) Major business details: Automatic Train Control devices (ATC), Simple-structure and high-Performance ATC by Radio Communication System (SPARCS), and so on. 9 Orders Received/Sales Trend (Smart Mobility) Plan Smart mobility business 62 75 80 0 20 40 60 80 100 March 2022 March 2023 March 2024 67 75 85 0 20 40 60 80 100 March 2022 March 2023 March 2024 Tackle the development and commercialization of the products towards the implementation of the automatic driving services by linking the infrastructure such as the “Kuru Link” (first/last one mile travelling service) and signals with self-drive vehicles. (Plan) (Plan) Major business details: Traffic control systems, traffic signal control systems, traffic signal controllers/lights, and so on. Orders received Sales (Hundred million yen) (Hundred million yen) 10 Orders Received/Sales Trend (AFC) Plan AFC business 287 311 330 0 200 400 March 2022 March 2023 March 2024 281 293 370 0 200 400 March 2022 March 2023 March 2024 Address the development of cashless payment systems in view of the full-scale development of MaaS, a new-type platform monitoring system using a 3D ranging image sensor with low investment cost, and low-cost platform doors. (Plan) (Plan) Major business details: Automatic ticket gates, platform doors, parking control systems, and so on. Orders received Sales (Hundred million yen) (Hundred million yen) 11 Orders Received/Sales Trend (Smart City) Plan Smart city business 74 72 90 0 20 40 60 80 100 March 2022 March 2023 March 2024 75 79 90 0 20 40 60 80 100 March 2022 March 2023 March 2024 Promote the building security solution project including entry/exit systems that respond to the new technologies such as face recognition and non-contact technologies, and tackle the development of a variety of robots. (Plan) (Plan) Major business details: Security gates, automatic cleaning robots, 3D ranging image sensors, and so on. Orders received Sales (Hundred million yen) (Hundred million yen) 12 Orders Received/Sales Trend (By Domestic/Overseas Business) Plan 402 373 460 356 332 454 37 242 80 0 41 6 0 200 400 600 800 1,000 1,200 March 2022 March 2023 March 2024 (Plan) 797 990 1,000 422 408 443 351 372 414 65 62 87 10 11 6 0 200 400 600 800 1,000 1,200 March 2022 March 2023 March 2024 (Plan) ICT ソリューション（海外） 交通運輸インフラ（海外） ICT ソリューション（国内） 交通運輸インフラ（国内） 850 854 950  ICT Solution (Overseas)  Transportation Infrastructure (Overseas)  ICT Solution (Domestic)  Transportation Infrastructure (Domestic) Orders received Sales (Hundred million yen) (Hundred million yen) 13 By Segment (Profit by Segment) Plan (Unit: Hundred million yen) March 2022 March 2023 March 2024 Plan Change from previous period Transport Infrastructure business 52 51 55 +3 ICT solution business 33 33 39 +5 Whole company expenses - 31 - 33 -34 -0 Total 53 51 60 +8 14 Investment Plan 21 23 28 March 2022 March 2023 March 2024 26 28 37 March 2022 March 2023 March 2024 Capital investment 25 26 46 March 2022 March 2023 March 2024 Depreciation expenses Research and development expenses Number of employees hired (employees) 35 32 50 March 2022 March 2023 March 2024 (Plan) (Plan) (Plan) (Plan) (Unit: Hundred million yen) March 2022 March 2023 March 2024 Plan Change from previous period Capital investment 25 26 46 +19 Depreciation expenses 21 23 28 +5 Research and development expenses 26 28 37 +8 Number of employees hired (employees) * 35 32 50 +18 * Number of employees hired relates to Nippon Signal only. 15 Profit Distribution (Dividend) Year to March 2023 27 yen yearly End of 2Q 7 yen Year end 20 yen (Regular dividend only) Dividend payout ratio 35.8% Year to March 2024 (Plan) Regarding dividends, Nippon Signal is making the utmost effort to maintain the stability and continuity of the consolidated divided payout ratio of around 30% while reinforcing the financial structure and giving consideration to the business results and new investments in each term. The dividend of 27 yen is maintained as the annual dividend based on our focus on the dividend stability and continuity. Year to March 2022 27 yen yearly End of 2Q 7 yen Year end 20 yen (Regular dividend only) Dividend payout ratio 37.4 % Dividend yield 3.06 ％ 37.4% 41.3% 35.8% March 2022 March 2023 March 2024 Annual dividend Dividend payout ratio 27 yen yearly End of 2Q 7 yen Year end 20 yen (Regular dividend only) Dividend payout ratio 41.3% Dividend yield 2.54 ％ * Dividend yield is calculated by dividing the annual dividend by the yearend share price. 27 yen 27 yen 27 yen (Plan) 16 Progress of Medium-term Management Plan “Next Stage 24” Creation of value with customers in the post COVID society Enhancement of design and manufacturing strengths in software-first era Expansion of overseas business and increase of earning capacity E: Participation in TCFD *2 and promotion of decarbonized society S: Human resource system reform, work style reform and promotion of health and productivity management G: Response to Corporate Governance Code revision and conformity to the Prime Market Reorganization of Group company functions, human resource development, introduction of next-generation enterprise system Basic concept: Support Next Stage of Infrastructure Expanding solution business and developing products aimed to support customers’ structural reform Intensively focusing on customer orientation and enhancing marketing strength and proposal skills Operating business to take hold in a megacity and promoting strategies for business units Streamlining and strengthening global management abilities Optimizing QCD starting with design process and enhancing the group strength and in-house production Establishing a design and production system which enables development capability enhancement and DX *1 Key issues １ ２ ３ * 1 DX: Digital Transformation * 2 TCFD: Task Force on Climate-Related Financial Disclosures Promotion of ESG management and enhancement of corporate value 17 Creation of Value with Customers in the Post COVID Society Main topics in the 140th year *1 Communication-Based Train Control (system that controls and protects trains through wireless communication of a large volume of data between a ground coil and a cab coil regardless of the blocking of track circuits, etc.) *2 BRT: Bus Rapid Transit *3 I2V: Automobile communication from Infrastructure to Vehicle *4 Kuru Link: Name of the Last One Mile transportation service around a station Railway signals Details <1> Automatic operation Running Test of JR Kyushu Kagoshima Main Line Supplementary material P10 <2> CBTC * １ Received an order for system design for verification test of Seibu Railway Tamagawa Line Supplementary material P11 MaaS (cashless) Details <6> Non-contact credit card payment JR Kyushu verification test Supplementary material P21 <7> Fukuoka City subway verification test <8> Operation started at Enoshima Electric Railway <9> QR code Verification test for JR Kyushu and JR West in Fukuoka and Nagasaki areas Automatic operation (smart mobility) Details <3> BRT * ２ Received orders for JR East Kesennuma Line BRT and JR Kyushu Hitahikosan Line BRT Supplementary material P14 <4> I2V *3 15 projects in total including Kashiwanoha, Utsunomiya, Shiojiri, Hitachi and Sakaimachi Supplementary material P15, 16 <5> Kuru Link *4 1st phase verification test for Urawa Misono Supplementary material P17 18 Aim at the improvement of earnings through the fulfilment and maintenance of overseas projects and continuous business expansion through extension projects and market development, and business development established in large cities as well as reinforcement of adaptability to the global environment by promoting overseas localization. Newly established hub Nippon Signal Bangladesh Private Limited (November 2022) New Line Cairo Metro Line No. 4 ( Railway signals and PSD) Manila Subway ( Railway signals ) Extension Delhi Metro Line No. 8 ( Railway signals ) Increase of vehicles Beijing Metro Line 15 (Railway signal) Expansion of Overseas Business and Increase of Earning Capacity Business results in the 140th year Plan for the 141st year New India (AFC) Bangladesh (Railway signal, AFC, PSD) Extension India (Railway signal) Indonesia (Railway signal) Doubletracking/ increase of vehicles Taiwan (Railway signal) 19 Enhancement of Design and Manufacturing Strengths in Software-first Era Started operation of the stage gate system designed for the purpose of enhancing QCD and implemented the efficiency improvement of the production line for the increase of production of platform doors. Promotes development and design of products which are competitive in the market (automatic train operation, utilization of cloud and cashless payment in the transportation area) in the software-first era.