Nippon Electric Glass : Consolidated Financial Results for the First Quarter of the Year Ending December 31, 2023(Unaudited)

Translation

Notice: This English version is a translation of the original disclosure in Japanese released on April 28, 2023 at 15:00 (GMT+9) and is only for reference purposes. In the case where any differences occur between the English version and the original Japanese version, the Japanese version will prevail.

April 28, 2023

CONSOLIDATED FINANCIAL RESULTS

for the First Quarter of the Year Ending December 31, 2023 (Unaudited)

Company name:	Nippon Electric Glass Co., Ltd.
Listing:	Prime Market of the Tokyo Stock Exchange
Securities identification code:	5214
URL:	https://www.neg.co.jp/
Representative:	Akira Kishimoto, President and Representative Director
Inquiries:	Mamoru Morii, Director and Senior Vice President
	TEL: [phone] (from overseas)
Scheduled date to file quarterly report:	May 12, 2023
Scheduled date to commence dividend payments:	-
Supplementary material on quarterly financial results:	None
Quarterly financial results presentation meeting:	None

(in millions of yen with fractional amounts discarded, unless otherwise noted)

1. Consolidated performance for the first quarter of the year ending December 31, 2023 (From January 1, 2023 to March 31, 2023)

(1) Consolidated operating results (cumulative)		(Percentages indicate year-on-year changes.)
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
For the three months ended		%		%		%		%
March 31, 2023	67,922	(21.0)	(1,941)	-	(1,648)	-	846	(94.1)
March 31, 2022	85,991	25.4	10,515	51.8	15,820	31.9	14,289	110.0
Note: Comprehensive income:
For the three months ended March 31, 2023:	2,607 million yen [(89.0%)]
For the three months ended March 31, 2022:	23,748 million yen [56.3%]
	Earnings		Diluted Earnings
	per share		per share
For the three months ended		yen		yen
March 31, 2023		9.09		-
March 31, 2022		153.61		-

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1. Consolidated financial position

		Total assets		Net assets	Equity ratio
As of					%
March 31, 2023		725,317		525,948	71.9
December 31, 2022		747,907		528,912	70.1
Reference: Equity:
As of March 31, 2023:	521,341 million yen
As of December 31, 2022:	524,344 million yen

2. Cash dividends

			Annual dividends
	First quarter-end	Second quarter-end	Third quarter-end	Year-end	Total
For the year ended	yen	yen	yen	yen	yen
-	60.00	-	60.00	120.00
December 31, 2022
For the year ending	-	---	---	---	---
December 31, 2023
For the year ending	---	60.00	-	60.00	120.00
December 31, 2023
(Forecasts)

Note: Revision of the forecasts most recently announced: None

3. Consolidated earnings forecasts for the year ending December 31, 2023 (From January 1, 2023 to December 31, 2023)

(Percentages indicate year-on-year changes.)

	Net sales	Operating profit	Ordinary profit	Profit attributable	Earnings
	to owners of parent	per share
For the six months		%		%		%		%	yen
140,000	(19.0)	(4,000)	-	(3,000)	-	0	(100.0)	0.00
ending June 30, 2023
For the year	340,000	4.7	10,000	(61.8)	10,000	(70.6)	8,000	(71.6)	85.98
ending December 31, 2023
Note: 1. Revision of the forecasts most recently announced: Yes

2. The full-year consolidated earnings forecast remains unchanged from the previous forecast (February 3, 2023). For details of the revision to the consolidated earnings forecast, please refer to "Notice Concerning Revision of Consolidated Earnings Forecasts for the Six Months Ending June 30, 2023," which was announced today (April 28, 2023).

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* Notes

1. Changes in significant subsidiaries during the three months under review (changes in specified subsidiaries resulting in the change in scope of consolidation): None
2. Application of special accounting for preparing the quarterly consolidated financial statements: Yes
3. Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements after error corrections
4. 1. Changes in accounting policies due to revisions to accounting standards: None
   2. Changes in accounting policies due to other reasons: None
   3. Changes in accounting estimates: None
   4. Restatement of prior period financial statements after error corrections: None
5. Number of issued shares (common stock)
6. 1. Total number of issued shares at the end of the period (including treasury stock)

As of March 31, 2023	99,523,246 shares
As of December 31, 2022	99,523,246 shares

1. Number of treasury shares at the end of the period

As of March 31, 2023	6,480,531 shares
As of December 31, 2022	6,480,511 shares

1. Average number of shares during the period (cumulative from the beginning of the fiscal year)

For the three months ended March 31, 2023	93,042,730 shares
For the three months ended March 31, 2022	93,027,144 shares

• This quarterly financial results report is exempt from quarterly review by Certified Public Accountants or Audit firm.
• Proper use of earnings forecasts, and other special directions

The forward-looking statements, including earnings forecasts, contained in these materials are based on certain assumptions deemed to be reasonable by the Company and its subsidiaries ("the Company Group") and include risks and contingencies. Actual business results may differ substantially due to a number of factors. For more details, please refer to the section of "(2) Information regarding consolidated earnings forecasts and other forward-looking statements in Qualitative Information Regarding Consolidated Results for the Three Months" on page 5.

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Qualitative Information Regarding Consolidated Results for the Three Months

1. Information regarding operating results (Three months ended March 31, 2023)

1. Overview

Net sales for the first quarter of the fiscal year (from January 1 to March 31, 2023) were lower than those of the same period of the previous fiscal year (from January 1 to March 31, 2022).

In terms of profit/loss, operating loss and ordinary loss were recorded. Profit attributable to owners of parent was significantly lower than that of the same period of the previous fiscal year.

B. Operating results			(Billions of yen)
		Three months ended	Three months ended	Change (%)
		March 31, 2022	March 31, 2023
	Net sales	85.9	67.9	(21)
	Operating profit (loss)	10.5	(1.9)	‐
	Ordinary profit (loss)	15.8	(1.6)	‐
	Profit attributable to	14.2	0.8	(94)
	owners of parent

Note: Amounts less than 100 million yen are omitted.

(Sales by products)

			Three months ended	Three months ended	Change
Reporting			March 31, 2022	March 31, 2023
	Segment
segment		billions	(%)	billions	(%)	billions	(%)
			of yen	of yen	of yen
		Electronics
		and	43.8	51	29.3	43	(14.5)	(33)
Glass		Information
	Technology
Business
	Performance
		Materials and	42.1	49	38.5	57	(3.5)	(8)
		Others
	Total	85.9	100	67.9	100	(18.0)	(21)

Note: Amounts less than 100 million yen are omitted.

Electronics and Information Technology:

Sales of glass for flat panel displays (FPDs) were significantly lower than those of the same period of the previous fiscal year, affected by customers' production adjustments. Sales of glass for electronic devices were lower than those of the same period of the previous fiscal year due to sluggish demand for use in home appliances and auto parts, despite strong demand for use in semiconductors.

Performance Materials and Others:

Sales of glass fibers were lower than those of the same period of the previous fiscal year due to a slow recovery in demand, especially for high-performance resin used in auto parts, and a decrease in the transfer of logistics-related surcharges to customers, etc. Sales of glass tubing for pharmaceutical and medical use and heat-resistant glass exceeded those of the same period of the previous fiscal year, supported by product price revisions and surcharges, despite softening demand.

(Profit/loss)

With soaring raw material and fuel prices pushing up costs, we strengthened efforts to reduce expenses and improve productivity and worked to recover costs by revising product prices and levying surcharges. Nevertheless, the impact of rising costs due to lower capacity utilization rates

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mainly for glass for FPDs was significant, and we recorded operating loss (operating profit for the same period of the previous fiscal year). In addition, non-operating income such as foreign exchange gains attributable to revaluation of receivables and payables related to borrowings by overseas subsidiaries was insufficient to offset the operating loss, resulting in ordinary loss (ordinary profit for the same period of the previous fiscal year). On the other hand, profit attributable to owners of parent was achieved, mainly due to the recording of extraordinary income on insurance claim income related to power outages at a domestic plant in 2020 and gain on sale of investment securities, although it was significantly lower than that of the same period of the previous fiscal year.

1. Information regarding consolidated earnings forecasts and other forward-looking statements (Consolidated earnings forecasts for the six months ending June 30, 2023)

				(Billions of yen)
	Six months ending June 30, 2023	Change	Change
	Previous forecast (A)	Revised forecast (B)	(B - A)	(%)
Net sales	160.0	140.0	(20.0)	(13)
Operating profit (loss)	3.0	(4.0)	(7.0)	‐
Ordinary profit (loss)	3.0	(3.0)	(6.0)	‐
Profit attributable to	2.0	0.0	(2.0)	(100)
owners of parent

Note: Amounts less than 100 million yen are omitted.

(Consolidated earnings forecasts for the year ending December 31, 2023)

		(Billions of yen)
		Year ending
		December 31, 2023
Net sales		340.0
Operating profit		10.0
Ordinary profit		10.0
Profit attributable to	owners	8.0
of parent

Note: Amounts less than 100 million yen are omitted.

Demand remains generally sluggish against the backdrop of soaring raw material and fuel prices and a slow economic recovery due to monetary tightening in many countries, and it is expected that it will take more time for sales to recover. In terms of profit/loss, higher costs due to lower capacity utilization rates for glass for FPDs and glass fiber are expected to suppress profits. In light of the fact that raw material and fuel prices are expected to be lower than initially expected but remain high, we have revised downward the consolidated earnings forecast for the six months ending June 30, 2023, which was announced on February 3, 2023, as shown in the table above.

Demand is expected to recover through the second half of the year. Along with working to reduce expenses, improve productivity, and tailor capacity utilization to demand trends, the Company Group will strive to improve profitability by recovering costs through revising product prices and levying surcharges.

The full-year consolidated earnings forecast for the fiscal year ending December 31, 2023 remains unchanged from the previous forecast (February 3, 2023), as the outlook for the business environment, including trends in raw material and fuel prices, remains highly uncertain, and it is difficult to predict the impact on business performance.

The forward-looking statements, including earnings forecasts, contained in these materials are based on certain assumptions deemed to be reasonable by the Company Group and include risks and contingencies. Actual business results may differ substantially due to a number of factors. Factors that may impact actual business results include the economic conditions of global markets, various rules and regulations such as those concerning trade, significant fluctuation of supply and demand of products in principal markets as well as the financial situation showing extensive changes in

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