Honda Tsushin Kogyo : Financial Results Presentation for the Nine Months Ended December 31, 2021 (April 1, 2021 to December 31, 2021)

																			Securities Code: 6826	1																		2
																			1-1. Results for the nine months ended December 31, 2021
																																■ Net sales increased due to the growth of the connector business, reflecting the favorable market
																																environment.
																																■ Operating profit recovered, mainly reflecting an increase in sales, expansion of production, and
																																streamlining.
																																■ Profits exceeded values in the full-year earnings forecast, resulting an upward revision of the full-
					Financial Results Presentation						year earnings forecast and dividend forecast.
										Exchange rate											Million yen (profit rate)
						for the Nine Months Ended December 31, 2021										(yen/dollar)		Nine months	Nine months		YoY		Full-year forecast	Progress
																ended Dec. 2020	ended Dec. 2021		(Announced on May 11)
															During the period/
									(April 1, 2021 to December 31, 2021)															Period-end		106 yen/104 yen	111 yen/115 yen				107 yen/107 yen
																																Net sales			10,577		13,362	126%		16,500	81%
						Business performance has continued to recover and grow.
		The full-year earnings forecast and dividend forecast have been revised upward.
			Operating				-232		586	-		500	117%
																																profit			(-2.2%)		(4.4%)		(3.0%)
																																Ordinary				-75		624	-		450	139%
											January 31, 2022															profit			(-0.7%)		(4.7%)		(2.7%)
									Honda Tsushin Kogyo Co., Ltd.															Profit				-46		459	-		320	143%
					Kinji Kashio, President and Representative Director								(-0.4%)		(3.4%)			(1.9%)
								* Values from past financial results were corrected retrospectively due to the application of the Accounting Standard for Revenue Recognition.
																													3																		4
								1-2. Quarterly performance trends												1-3. Sales by sector
		The operating profit margin for the 3rd quarter improved significantly, to 7.6%.				Sales in the telecommunications and factory automation sectors increased with
						Business performance has continued to recover and grow.																expanded production.
																							Million yen				The automobile connector sector continued its trend of modest recovery.
																														(Million yen)						4,695		Information systems
																		4,462	4,695					4,280 4,204	4,462			with new customers and year-on-year growth in full-year
												4,280																												Major customers remained in a slump. The start of business
		Net sales				3,862	4,204																	3,862			708	676			results are targeted.
		3,607																						3,607	802	702			Automobile connectors
3,107																																			Sales have been recovering since hitting bottom in 1Q, but
																		358				3,107		685
																					753				1,466			the recovery has been modest because of a shortage of
																								(7.6%)											1,310			materials and components such as semiconductors.
																																			3.70 million
																														674					1,229	3.65 million	units	Consumer products
	Operating																												1,445	3.30 million	units
							158					141													1,474	4.00 million	units					Products for PCs and cameras were strong, but those for
		profit																						1,150	units			431
								87
																	864	4.50 million			478			projectors were somewhat weaker.
		(margin)							(3.7%)		(3.2%)									2.80 million		units		452
																					2.15 million	units
-194				5				(2.1%)															units				414
																		Quantity of products for							FA
-44																			automotive cameras	374
(-6.2%)	(0.1%)																			288	371		1,139	1,237	1,356			The market continued to boom, and sales increased with
						(-1.2%)																									997					expanded production. Growth to the next level is targeted to
																														729	777	755							eliminate the order backlog.
		20/1Q	20/2Q	20/3Q	20/4Q	21/1Q	21/2Q	21/3Q									682	729	766		Telecommunications
			552	556	576	622
					Products for telecommunications infrastructure remained
◆ Exchange rate (yen/dollar)
																																	strong, partly because of lingering demand related to
	During the period
																										20/1Q	20/2Q	20/3Q	20/4Q	21/1Q	21/2Q	21/3Q		teleworking and more time spent at home.
		108 yen	106 yen	105 yen	106 yen	109 yen	110 yen	114 yen

	5		6
2. Analysis of operating profit for 3Q of FY2021	3. Revision of full-year earnings forecast
(Compared to 2Q of FY2021)		and increase of dividend

Profit increased due in part to an increase in sales in the connector business,	Full-year earnings forecast was revised upward reflecting the continuing recovery
	expansion of production, and streamlining.				and growth of business performance.
						Million yen		Dividend forecast: Revised upward from 8 yen to 12 yen
						(Profit rate)							Million yen (Profit rate)
					Decrease in profit
										Revised
					in information			Nine months	Initial forecast	Progress	Progress	YoY
							forecast for
				Exchange rate	systems			ended Dec. 2021	for FY2021
			Streamlining,	+40	-10						FY2021
	Production	Product mix Cost increase	etc.			Net sales		13,362	16,500	81%	18,000	74%	121%
Gain from	expansion	+30	-35	+35
+60
increase in sales									586	500		850
of connectors		Increase in logistics cost:	-10			Operating profit	118%	69%	ー
+95				(4.4%)	(3.0%)	(4.7%)
		Increase in prices of materials		358
		and components:	-15				624	450		850
		Other:		-10		(7.6%)	Ordinary profit		139%	73%	575%
								(4.7%)	(2.7%)	(4.7%)
141							Profit		459	320	143%	650	71%	856%
(3.2%)								(3.4%)	(1.9%)	(3.6%)
							Cash dividend		ー	8 yen	ー	12 yen	ー	+5 yen
21/2Q	217 million yen increase		21/3Q	(Payout Ratio)		(58%)	(43%)

◆ Exchange rate (yen/dollar)		Exchange rate (yen/dollar)
	During the period/Period-end
During the period
	111 yen/115 yen	107 yen/107 yen	111 yen/110 yen
110 yen	114 yen

7

8

4. Trends in the next fiscal year

5. Initiatives for the next fiscal year

Demand is expected to remain at a high level.

Accelerating initiatives to develop new products and increase profitability

Net sales are expected to increase, partly reflecting a record order backlog in

New product development

the telecommunications, factory automation, and consumer products sectors.

Information systems sector

(Million yen)

Telecommunications sector

Compact, high-speed transmission (6Gbps/12Gbps) connectors Compact relay connector for robots

Information

Market trends

FY2022 sales

Market trends

Sales

- An industry-leading level of transmission

(Compared to FY2021)

- The smallest size in the industry

systems Telecommunications

speed among automobile connectors

695

726

- High wiring workability

- The smallest size in the industry

Expansion of new businesses and a

~21/3Q

Sales of products for

These products are being exhibited at a trade show (IIFES 2022).

recovery of orders are expected.

telecommunications infrastructure

Engineering samples will begin to be provided in the near future.

AutomobileQuarterly average

are expected to remain strong.

4,454

(such as FTTH, data centers, and 5G)

Automobile connector sector

connectors

FA

Profitability improvement

1,335

1,244

Factory automation sector

Production automation

Price revision

Market trends

Sales

Focusing on automating the production of optical connectors

Partially revising sales prices in response to the rise in

Consumer

Market trends

Sales

(finished), compact I/O connectors (finished), SD sockets,

logistics and procurement costs, and taking further steps to

products

connectors for sensing cameras, and other products

eliminate negative impacts

454

Automatic equipment

A recovery is expected given the

for optical connectors

Production will be expanded to eliminate

Effect of productivity improvement: Approx. 250 million yen per year

reduced impact of the shortages of Consumer products sector

the order backlog, which is expected to

semiconductors and other materials

and components.

Market trends

FY2022 sales

remain at a high level.

Renewal of the product website

A favorable performance is expected,

The renewed website was opened today (Jan. 31) with a

mainly in products for DSLR cameras.

completely new design, content, and system architecture.

Inquiries concerning IR

Honda Tsushin Kogyo Co., Ltd.

Corporate Planning Group

MAIL: [e-mail]

URL: https://www.htk-jp.com/

9									10
Reference: Consolidated orders in the connector business
								Unit: %
				1Q	2Q	3Q	4Q	Annual
			FY2021	+36	-14	-4	-
			Quarter-to-
			quarter change					-
				+140	+77	+27	-
			YoY
			1$=	109 yen	110 yen	114 yen
			FY2020	-10	+11	+34	+13
			Quarter-to-
			quarter change					+12
			YoY	-18	-8	+27	+50
Search			1$=	108 yen	106 yen	105 yen	106 yen	106 yen
			Calculated based on real exchange rates