REG - Mitsubishi Elect. - 3rd Quarter Results
RNS Number : 7056BMitsubishi Electric Corporation03 February 2020
FOR IMMEDIATE RELEASE
No. 3332
Investor Relations Inquiries
Media Inquiries
Investor Relations Group, Corporate Finance Division
Public Relations Division
Mitsubishi Electric Corporation
Mitsubishi Electric Corporation
Cad.Irg@rk.MitsubishiElectric.co.jp
www.MitsubishiElectric.com/news/
Mitsubishi Electric Announces Consolidated Financial Results
for the First 9 Months and Third Quarter of Fiscal 2020
TOKYO, February 3, 2020 - Mitsubishi Electric Corporation (TOKYO: 6503) announced today its consolidated financial results for the first 9 months and third quarter, ended December 31, 2019, of the current fiscal year ending March 31, 2020 (fiscal 2020).
1. Consolidated First 9 Months Results (April 1, 2019 - December 31, 2019)
Revenue:
3,250.1
billion yen
(Substantially unchanged from the same period last year)
Operating profit:
182.2
billion yen
(10% decrease from the same period last year)
Profit before income taxes:
198.7
billion yen
(10% decrease from the same period last year)
Net profit attributable to Mitsubishi Electric Corp. stockholders:
159.7
billion yen
(1% increase from the same period last year)
The economy in the first 9 months of fiscal 2020, from April through December 2019, saw a slower growth in China, with the corporate sector experiencing a slowdown in exports and capital expenditures for fixed assets. In the U.S., the economy continued to grow due primarily to buoyant personal consumption, but the corporate sector slowed down mainly in capital expenditures. In addition, the economic recovery became slower in Japan and Europe, with Japan seeing a decrease in production and exports, and Europe experiencing a fall in production.
Under these circumstances, revenue for the first 9 months of fiscal 2020 remained substantially unchanged compared to the same period of the previous fiscal year, recording 3,250.1 billion yen. This was due primarily to increased revenue in the Energy and Electric Systems, Information and Communication Systems, Electronic Devices and Home Appliances segments, and decreased revenue in the Industrial Automation Systems segment and other factors.
Operating profit decreased by 10% compared to the same period of the previous fiscal year to 182.2 billion yen mainly due to decreased profit in the Industrial Automation Systems segment. Meanwhile, the increase in other profit (loss) within operating profit was due primarily to income from sale of land.
Profit before income taxes decreased by 10% compared to the same period of the previous fiscal year to 198.7 billion yen.
Net profit attributable to Mitsubishi Electric Corporation stockholders increased by 1% compared to the same period of the previous fiscal year to 159.7 billion yen due to a decrease in income taxes resulting from the reorganization of its affiliated company outside Japan, despite a decrease in profit before income taxes.
Consolidated Financial Results by Business Segment (First 9 months, Fiscal 2020)
Energy and Electric Systems
Revenue:
913.4
billion yen
(3% increase from the same period last year which recorded 885.8 billion yen)
Operating profit:
47.4
billion yen
(8.2 billion yen increase from the same period last year which recorded 39.2 billion yen)
The social infrastructure systems business saw an increase in orders from the same period of the previous fiscal year due primarily to an increase in the power systems business inside and outside Japan and the public utility systems business in Japan. Revenue for this business also increased from the same period of the previous fiscal year, due to an increase in the transportations systems business worldwide.
The building systems business saw a decrease in orders from the same period of the previous fiscal year due to market stagnation in China and the Middle East, while revenue in this business increased compared to the same period of the previous fiscal year due primarily to an increase in new installations and renewals of elevators and escalators in Japan, mainly in the Tokyo metropolitan area.
As a result, revenue for this segment increased by 3% from the same period of the previous fiscal year to 913.4 billion yen. Operating profit increased by 8.2 billion yen from the same period of the previous fiscal year to 47.4 billion yen, due primarily to an increase in revenue.
Industrial Automation Systems
Revenue:
1,016.0
billion yen
(7% decrease from the same period last year which recorded 1,094.2 billion yen)
Operating profit:
58.9
billion yen
(55.1 billion yen decrease from the same period last year which recorded 114.0 billion yen)
The factory automation systems business saw decreases in both orders and revenue from the same period of the previous fiscal year due primarily to continued stagnation in demand for automotive-related investments worldwide, semiconductor and machinery-related investments in Japan, and investments related to organic light emitting diodes (OLED) and smartphones outside Japan, in addition to impact from the yen appreciating against other currencies.
The automotive equipment business saw decreases in both orders and revenue from the same period of the previous fiscal year mainly due to a decrease in sales of products reflecting a slowdown in demand worldwide for new cars and impact from the yen appreciating against other currencies, despite increased sales of electric-vehicle related equipment in response to growth in the particular market worldwide.
As a result, revenue for this segment decreased by 7% from the same period of the previous fiscal year to 1,016.0 billion yen. Operating profit decreased by 55.1 billion yen from the same period of the previous fiscal year to 58.9 billion yen due primarily to a decrease in revenue, a shift in product mix and upfront investment for growth drivers.
Information and Communication Systems
Revenue:
302.0
billion yen
(5% increase from the same period last year which recorded 287.5 billion yen)
Operating profit:
11.1
billion yen
(4.5 billion yen increase from the same period last year which recorded 6.6 billion yen)
The telecommunications systems business saw increases in both orders and revenue from the same period of the previous fiscal year due primarily to increased demand in communications infrastructure equipment.
The information systems and service business saw increases in both orders and revenue from the same period of the previous fiscal year due primarily to an increase in the system integrations business.
The electronic systems business saw a decrease in orders from the same period of the previous fiscal year mainly due to a decrease in large-scale projects for the defense systems business, while revenue increased from the same period of the previous fiscal year due primarily to an increase in large-scale projects for the defense systems business.
As a result, revenue for this segment increased by 5% from the same period of the previous fiscal year to 302.0 billion yen. Operating profit increased by 4.5 billion yen from the same period of the previous fiscal year to 11.1 billion yen due primarily to an increase in revenue.
Electronic Devices
Revenue:
154.4
billion yen
(4% increase from the same period last year which recorded 148.5 billion yen)
Operating profit:
5.5
billion yen
(4.7 billion yen increase from the same period last year which recorded 0.7 billion yen)
The electronic devices business saw an increase in orders and revenue rose by 4% from the same period of the previous fiscal year to 154.4 billion yen mainly due to increased demand for automotive power modules and recovery in demand for optical communication devices.
Operating profit increased by 4.7 billion yen from the same period of the previous fiscal year to 5.5 billion yen due primarily to an increase in revenue and a shift in product mix.
Home Appliances
Revenue:
830.7
billion yen
(3% increase from the same period last year which recorded 806.0 billion yen)
Operating profit:
69.7
billion yen
(18.9 billion yen increase from the same period last year which recorded 50.7 billion yen)
The home appliances business saw an increase in revenue by 3% from the same period of the previous fiscal year to 830.7 billion yen mainly due to an increase in sales of air conditioners for Japan, North America and Europe.
Operating profit increased by 18.9 billion yen from the same period of the previous fiscal year to 69.7 billion yen due primarily to an increase in revenue.
Others
Revenue:
480.3
billion yen
(4% decrease from the same period last year which recorded 500.2 billion yen)
Operating profit:
16.1
billion yen
(Substantially unchanged from the same period last year which recorded 16.1 billion yen)
Revenue decreased by 4% from the same period of the previous fiscal year to 480.3 billion yen mainly due to decreases in procurements and logistics for the Mitsubishi Electric Group at affiliated companies.
Operating profit remained substantially unchanged from the same period of the previous fiscal year at 16.1 billion yen due primarily to cost improvements.
2. Consolidated Third-quarter Results (October 1, 2019 - December 31, 2019)
Revenue:
1,067.6
billion yen
(2% decrease from the same period last year)
Operating profit:
68.0
billion yen
(10% decrease from the same period last year)
Profit before income taxes:
74.7
billion yen
(7% decrease from the same period last year)
Net profit attributable to Mitsubishi Electric Corp. stockholders:
68.4
billion yen
(21% increase from the same period last year)
Revenue for this quarter, from October through December 2019, was 1,067.6 billion yen, a 2% decrease from the same period of the previous fiscal year, due to decreased revenue in the Industrial Automation Systems segment and other factors.
Operating profit was 68.0 billion yen, a 10% decrease from the same period of the previous fiscal year, with decreased profits mainly in the Industrial Automation Systems and Home Appliances segments. Meanwhile, the increase in other profit (loss) within operating profit was mainly due to income from sale of land.
Profit before income taxes decreased by 7% compared to the same period of the previous fiscal year to 74.7 billion yen.
Net profit attributable to Mitsubishi Electric Corporation stockholders increased by 21% compared to the same period of the previous fiscal year to 68.4 billion yen due to a decrease in income taxes resulting from the reorganization of its affiliated company outside Japan, despite a decrease in profit before income taxes.
Consolidated Financial Results by Business Segment (Third Quarter, Fiscal 2020)
Energy and Electric Systems
Revenue:
321.2
billion yen
(1% increase from the same period last year which recorded 317.2 billion yen)
Operating profit:
27.0
billion yen
(3.3 billion yen increase from the same period last year which recorded 23.6 billion yen)
The social infrastructure systems business saw an increase in orders from the same period of the previous fiscal year due primarily to increases in the transportation systems business worldwide and the public utility systems business in Japan. Revenue for this business also increased from the same period of the previous fiscal year, due to increases in the transportation systems and public utility systems businesses in Japan.
The building systems business saw decreases in both orders and revenue from the same period of the previous fiscal year due primarily to a decrease in new installations of elevators and escalators in the Middle East, in addition to impact from the yen appreciating against other currencies.
As a result, revenue for this segment increased by 1% from the same period of the previous fiscal year to 321.2 billion yen. Operating profit increased by 3.3 billion yen from the same period of the previous fiscal year to 27.0 billion yen mainly due to an increase in revenue.
Industrial Automation Systems
Revenue:
329.7
billion yen
(9% decrease from the same period last year which recorded 363.9 billion yen)
Operating profit:
17.6
billion yen
(18.4 billion yen decrease from the same period last year which recorded 36.1 billion yen)
The factory automation systems business saw decreases in both orders and revenue from the same period of the previous fiscal year due primarily to a continued stagnation in demand for automotive-related investments worldwide and machinery-related investments in Japan, in addition to impact from the yen appreciating against other currencies.
The automotive equipment business saw decreases in both orders and revenue from the same period of the previous fiscal year mainly due to a decrease in sales of products reflecting a slowdown in demand worldwide for new cars and impact from the yen appreciating against other currencies, despite increased sales of electric-vehicle related equipment in response to growth in the particular market worldwide.
As a result, revenue for this segment decreased by 9% from the same period of the previous fiscal year to 329.7 billion yen. Operating profit decreased by 18.4 billion yen from the same period of the previous fiscal year to 17.6 billion yen due primarily to a decrease in revenue, a shift in product mix and upfront investment for growth drivers.
Information and Communication Systems
Revenue:
103.0
billion yen
(2% increase from the same period last year which recorded 100.7 billion yen)
Operating profit:
6.4
billion yen
(2.3 billion yen increase from the same period last year which recorded 4.1 billion yen)
The telecommunications systems business saw increases in both orders and revenue from the same period of the previous fiscal year mainly due to an increase in demand for communications infrastructure equipment.
The information systems and service business saw increases in both orders and revenue from the same period of the previous fiscal year mainly due to an increase in the system integrations business.
The electronic systems business saw decreases in orders from the same period of the previous fiscal year mainly due to a decrease in large-scale projects for the defense systems business. Revenue for this business also decreased from the same period of the previous fiscal year due primarily to a decrease in large-scale projects for the space systems business.
As a result, revenue for this segment increased by 2% from the same period of the previous fiscal year to 103.0 billion yen. Operating profit increased by 2.3 billion yen from the same period of the previous fiscal year to 6.4 billion yen due primarily to an increase in revenue and a shift in project portfolios.
Electronic Devices
Revenue:
51.2
billion yen
(10% increase from the same period last year which recorded 46.6 billion yen)
Operating profit:
4.4
billion yen
(5.0 billion yen improvement from the same period last year which recorded a loss of 0.5 billion yen)
The electronic devices business saw an increase in orders and revenue rose by 10% from the same period of the previous fiscal year to 51.2 billion yen mainly due to increased demand for automotive power modules and recovery in demand for optical communication devices.
Operating profit improved by 5.0 billion yen from the same period of the previous fiscal year to 4.4 billion yen due primarily to an increase in revenue and a shift in product mix.
Home Appliances
Revenue:
248.9
billion yen
(Substantially unchanged from the same period last year which recorded 248.9 billion yen)
Operating profit:
16.4
billion yen
(0.5 billion yen decrease from the same period last year which recorded 17.0 billion yen)
Revenue for the home appliances business remained substantially unchanged from the same period of the previous fiscal year, recording 248.9 billion yen, mainly due to an increase in sales of air conditioners for North America and Europe despite a decrease in sales of air conditioners for China and impact from the yen appreciating against other currencies.
Operating profit decreased by 0.5 billion yen from the same period of the previous fiscal year to 16.4 billion yen due primarily to impact from the yen appreciating against other currencies.
Others
Revenue:
164.0
billion yen
(5% decrease from the same period last year which recorded 172.4 billion yen)
Operating profit:
6.6
billion yen
(0.7 billion yen increase from the same period last year which recorded 5.8 billion yen)
Revenue decreased by 5% from the same period of the previous fiscal year to 164.0 billion yen mainly due to decreases in procurements and logistics for the Mitsubishi Electric Group at affiliated companies.
Operating profit increased by 0.7 billion yen from the same period of the previous fiscal year to 6.6 billion yen due primarily to cost improvements.
Financial Standing
An analysis on the status of assets, liabilities and equity on a consolidated basis
The Mitsubishi Electric Group has applied IFRS 16 Lease from the first quarter of the current fiscal year, thereby, as of the date of the initial application, it has added lease assets of 93.0 billion yen mainly as property, plant and equipment, and liabilities of 95.1 billion yen as bonds, borrowings and lease liabilities. (For details, refer to the 'Changes in Accounting Policies' in 'Notes to the Condensed Consolidated Financial Statements.')
Total assets as of the end of this fiscal quarter increased from the end of the previous fiscal year by 86.4 billion yen to 4,442.6 billion yen. The change in balance of total assets was mainly attributable to increases in property, plant and equipment by 88.9 billion yen and in inventories by 41.7 billion yen, while trade receivables and contract assets decreased by 84.5 billion yen primarily as a result of credit collection.
Total liabilities increased from the end of the previous fiscal year by 7.3 billion yen to 1,852.4 billion yen. The outstanding balances of bonds, borrowings and lease liabilities increased by 126.8 billion yen, while trade payables decreased by 49.6 billion yen, and other current liabilities also decreased by 71.4 billion yen. Meanwhile, bonds and borrowings increased by 39.4 billion yen from the end of the previous fiscal year to 315.3 billion yen, with the ratio of bonds and borrowings to total assets recording 7.1%.
Mitsubishi Electric Corporation stockholders' equity increased by 77.8 billion yen compared to the end of the previous fiscal year to 2,477.8 billion yen. The stockholders' equity ratio was recorded at 55.8%, representing a 0.7 point increase compared to the end of the previous fiscal year. These changes referred to above primarily result from an increase from recording a net profit attributable to Mitsubishi Electric Corporation stockholders of 159.7 billion yen, despite a decrease in dividend payment of 85.8 billion yen.
An analysis on the status of cash flow on a consolidated basis
Cash flows from operating activities for the first 9 months of fiscal 2020 increased by 117.7 billion yen compared to the same period of the previous fiscal year to 227.9 billion yen (cash in), mainly due to a decrease in payments for inventories. Cash flows from investing activities decreased by 3.2 billion yen compared to the same period of the previous fiscal year to 148.3 billion yen (cash out), due primarily to an increase in proceeds from sale of property, plant and equipment. As a result, free cash flow was 79.6 billion yen (cash in). Cash flows from financing activities were 91.8 billion yen (cash out) mainly due to dividend payment.
Forecast for Fiscal 2020 (year ending March 31, 2020)
The current consolidated earnings forecast for fiscal 2020, ending March 31, 2020, is unchanged from the announcement on October 31, 2019 as stated below.
Current consolidated forecast for fiscal 2020
Revenue
4,500.0
billion yen
(Substantially unchanged from fiscal 2019)
Operating profit
260.0
billion yen
(10% decrease from fiscal 2019)
Profit before income taxes
275.0
billion yen
(13% decrease from fiscal 2019)
Net profit attributable to Mitsubishi Electric Corp. stockholders
210.0
billion yen
(7% decrease from fiscal 2019)
Note: The results forecast above is based on assumptions deemed reasonable by the company at the present time, and actual results may differ significantly from forecasts. Please refer to the cautionary statement at the end.
Consolidated Financial Results Summary
1. Consolidated First 9 Months Results
(In billions of yen except where noted)
FY '19 9 months (A)
(Apr. 1, 2018 - Dec. 31, 2018)FY '20 9 months (B)
(Apr. 1, 2019 - Dec. 31, 2019)
B - A
B/A (%)
Revenue
3,264.1
3,250.1
(13.9)
100
Operating profit
201.4
182.2
(19.1)
90
Profit before income taxes
221.7
198.7
(22.9)
90
Net profit attributable to Mitsubishi Electric Corp. stockholders
158.8
159.7
0.8
101
Basic earnings per share attributable to Mitsubishi Electric Corp. stockholders
74.03 yen
74.45 yen
(0.42 yen)
101
2. Consolidated Third-quarter Results
(In billions of yen except where noted)
FY '19 Q3 (A)
(Oct. 1, 2018 -
Dec. 31, 2018)FY '20 Q3 (B)
(Oct. 1, 2019 - Dec. 31, 2019)
B - A
B/A
(%)
Revenue
1,094.0
1,067.6
(26.4)
98
Operating profit
75.5
68.0
(7.4)
90
Profit before income taxes
80.4
74.7
(5.6)
93
Net profit attributable to Mitsubishi Electric Corp. stockholders
56.4
68.4
11.9
121
Basic earnings per share attributable to Mitsubishi Electric Corp. stockholders
26.34 yen
31.91 yen
5.57 yen
121
Notes:
1) Consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS).
2) The company has 203 consolidated subsidiaries.
Condensed Quarterly Consolidated Financial Statements
Condensed Quarterly Consolidated Statement of Profit or Loss and Condensed Quarterly Consolidated Statement of Comprehensive Income (First 9 Months, Fiscal 2020)
(Condensed Quarterly Consolidated Statement of Profit or Loss)
(In millions of yen)
FY '19 9 months
(Apr. 1, 2018 -
Dec. 31, 2018)
FY '20 9 months
(Apr. 1, 2019 -
Dec. 31, 2019)
(A)
% of total
(B)
% of total
B - A
B/A
(%)
Revenue
3,264,125
100.0
3,250,129
100.0
(13,996)
100
Cost of sales
2,300,249
70.5
2,331,880
71.7
31,631
101
Selling, general and
administrative expenses
763,053
23.3
747,840
23.0
(15,213)
98
Other profit (loss)
617
0.0
11,848
0.3
11,231
-
Operating profit
201,440
6.2
182,257
5.6
(19,183)
90
Financial income
8,460
0.2
8,782
0.3
322
104
Financial expenses
3,347
0.1
5,572
0.2
2,225
166
Share of profit of investments accounted for using the
equity method15,193
0.5
13,315
0.4
(1,878)
88
Profit before income taxes
221,746
6.8
198,782
6.1
(22,964)
90
Income taxes
54,354
1.7
29,211
0.9
(25,143)
54
Net profit
167,392
5.1
169,571
5.2
2,179
101
Net profit attributable to:
Mitsubishi Electric Corp.
stockholders158,819
4.9
159,710
4.9
891
101
Non-controlling interests
8,573
0.2
9,861
0.3
1,288
115
(Condensed Quarterly Consolidated Statement of Comprehensive Income)
(In millions of yen)
FY '19
9 months (A)
(Apr. 1, 2018 -
Dec. 31, 2018)FY '20
9 months (B)
(Apr. 1, 2019 - Dec. 31, 2019)
B - A
Net profit
167,392
169,571
2,179
(Other comprehensive income (loss),
net of tax)
Items that will not be reclassified to
net profit
Changes in fair value of financial assets
measured at fair value through other comprehensive income(44,418)
13,537
57,955
Share of other comprehensive income of investments accounted for using the equity method
(464)
(138)
326
Subtotal
(44,882)
13,399
58,281
Items that may be reclassified to net profit
Exchange differences on translating foreign operations
(13,215)
(4,981)
8,234
Net changes in the fair value of cash flow hedges
(36)
78
114
Share of other comprehensive income of investments accounted for using the equity method
(1,651)
(2,873)
(1,222)
Subtotal
(14,902)
(7,776)
7,126
Total other comprehensive income (loss)
(59,784)
5,623
65,407
Comprehensive income
107,608
175,194
67,586
Comprehensive income attributable to:
Mitsubishi Electric Corp. stockholders
100,261
165,740
65,479
Non-controlling interests
7,347
9,454
2,107
Condensed Quarterly Consolidated Statement of Profit or Loss and Condensed Quarterly Consolidated Statement of Comprehensive Income (Third Quarter, Fiscal 2020)
(Condensed Quarterly Consolidated Statement of Profit or Loss)
(In millions of yen)
FY '19 Q3
(Oct. 1, 2018 -
Dec. 31, 2018)
FY '19 Q3
(Oct. 1, 2019 -
Dec. 31, 2019)
(A)
% of total
(B)
% of total
B - A
B/A
(%)
Revenue
1,094,019
100.0
1,067,601
100.0
(26,418)
98
Cost of sales
770,080
70.4
769,519
72.1
(561)
100
Selling, general and
administrative expenses
248,688
22.7
240,970
22.5
(7,718)
97
Other profit (loss)
249
0.0
10,915
1.0
10,666
-
Operating profit
75,500
6.9
68,027
6.4
(7,473)
90
Financial income
2,778
0.3
3,397
0.3
619
122
Financial expenses
3,009
0.3
570
0.1
(2,439)
19
Share of profit of investments accounted for using the
equity method5,186
0.5
3,906
0.4
(1,280)
75
Profit before income taxes
80,455
7.4
74,760
7.0
(5,695)
93
Income taxes
21,095
2.0
3,620
0.3
(17,475)
17
Net profit
59,360
5.4
71,140
6.7
11,780
120
Net profit attributable to:
Mitsubishi Electric Corp.
stockholders56,491
5.2
68,457
6.4
11,966
121
Non-controlling interests
2,869
0.2
2,683
0.3
(186)
94
(Condensed Quarterly Consolidated Statement of Comprehensive Income)
(In millions of yen)
FY '19 Q3 (A)
(Oct. 1, 2018 -
Dec. 31, 2018)
FY '20 Q3 (B)
(Oct. 1, 2019 -
Dec. 31, 2019)
B - A
Net profit
59,360
71,140
11,780
(Other comprehensive income (loss),
net of tax)
Items that will not be reclassified to
net profit
Changes in fair value of financial assets measured at fair value through other comprehensive income
(35,989)
7,536
43,525
Share of other comprehensive income of investments accounted for using the equity method
(702)
214
916
Subtotal
(36,691)
7,750
44,441
Items that may be reclassified to net profit
Exchange differences on translating foreign operations
(22,601)
26,308
48,909
Net changes in the fair value of cash flow hedges
(128)
169
297
Share of other comprehensive income of investments accounted for using the equity method
112
(618)
(730)
Subtotal
(22,617)
25,859
48,476
Total other comprehensive income (loss)
(59,308)
33,609
92,917
Comprehensive income
52
104,749
104,697
Comprehensive income attributable to:
Mitsubishi Electric Corp. stockholders
(673)
99,658
100,331
Non-controlling interests
725
5,091
4,366
Condensed Quarterly Consolidated Statement of Financial Position
(In millions of yen)
FY '19 (A)
(ended Mar. 31, 2019)
FY '20 Q3 (B)
(ended Dec. 31, 2019)
B - A
(Assets)
Current assets
2,624,293
2,596,561
(27,732)
Cash and cash equivalents
514,224
499,067
(15,157)
Trade receivables and contract assets
1,233,916
1,149,323
(84,593)
Inventories
729,098
770,827
41,729
Other current assets
147,055
177,344
30,289
Non-current assets
1,731,918
1,846,084
114,166
Investments accounted for using the equity method
197,959
194,798
(3,161)
Other financial assets
303,834
324,540
20,706
Property, plant and equipment
760,540
849,479
88,939
Other non-current assets
469,585
477,267
7,682
Total assets
4,356,211
4,442,645
86,434
(Liabilities)
Current liabilities
1,416,335
1,394,031
(22,304)
Bonds, borrowings and lease liabilities
104,969
203,716
98,747
Trade payables
559,641
510,013
(49,628)
Other current liabilities
751,725
680,302
(71,423)
Non-current liabilities
428,721
458,398
29,677
Bonds, borrowings and lease liabilities
193,469
221,555
28,086
Net defined benefit liabilities
176,087
181,404
5,317
Other non-current liabilities
59,165
55,439
(3,726)
Total liabilities
1,845,056
1,852,429
7,373
(Equity)
Mitsubishi Electric Corp. stockholders' equity
2,399,946
2,477,803
77,857
Common stock
175,820
175,820
-
Capital surplus
202,834
202,284
(550)
Retained earnings
1,960,466
2,034,216
73,750
Accumulated other comprehensive income (loss)
63,809
68,407
4,598
Treasury stock, at cost
(2,983)
(2,924)
59
Non-controlling interests
111,209
112,413
1,204
Total equity
2,511,155
2,590,216
79,061
Total liabilities and equity
4,356,211
4,442,645
86,434
Bonds, borrowings and lease liabilities
298,438
425,271
126,833
Excluding lease liabilities
275,972
315,378
39,406
Accumulated other comprehensive income (loss):
Exchange differences on translating foreign operations
8,368
928
(7,440)
Financial assets measured at fair value through other comprehensive income
55,503
67,463
11,960
Net changes in the fair value of cash flow hedges
(62)
16
78
Condensed Quarterly Consolidated Statement of Changes in Equity
FY' 19 First 9 Months (Apr. 1, 2018 - Dec. 31, 2018)
(In millions of yen)
Mitsubishi Electric Corp. stockholders' equity
Non-controlling interests
Total equity
Common stock
Capital surplus
Retained earnings
Accumulated other comprehensive income (loss)
Treasury stock, at cost
Total
Balance at beginning of period
175,820
199,442
1,811,348
109,492
(1,928)
2,294,174
103,045
2,397,219
Comprehensive income
Net profit
158,819
158,819
8,573
167,392
Other comprehensive income (loss), net of tax
(58,558)
(58,558)
(1,226)
(59,784)
Comprehensive income
-
-
158,819
(58,558)
-
100,261
7,347
107,608
Transfer to retained earnings
(2,732)
2,732
-
-
Dividends
(85,871)
(85,871)
(5,443)
(91,314)
Purchase of treasury stock
(1,054)
(1,054)
(1,054)
Disposal of treasury stock
0
0
0
0
Transactions with non-controlling interests and others
3,052
3,052
3,706
6,758
Balance at end of period
175,820
202,494
1,881,564
53,666
(2,982)
2,310,562
108,655
2,419,217
FY' 20 First 9 Months (Apr. 1, 2019 - Dec. 31, 2019)
(In millions of yen)
Mitsubishi Electric Corp. stockholders' equity
Non-controlling interests
Total equity
Common stock
Capital surplus
Retained earnings
Accumulated other comprehensive income (loss)
Treasury stock, at cost
Total
Balance at beginning of period
175,820
202,834
1,960,466
63,809
(2,983)
2,399,946
111,209
2,511,155
Cumulative effects of changes in accounting policies
(1,521)
(1,521)
(7)
(1,528)
Restated balance at beginning of period
175,820
202,834
1,958,945
63,809
(2,983)
2,398,425
111,202
2,509,627
Comprehensive income
Net profit
159,710
159,710
9,861
169,571
Other comprehensive income (loss), net of tax
6,030
6,030
(407)
5,623
Comprehensive income
-
-
159,710
6,030
-
165,740
9,454
175,194
Transfer to retained earnings
1,432
(1,432)
-
-
Dividends
(85,871)
(85,871)
(6,721)
(92,592)
Purchase of treasury stock
(785)
(785)
(785)
Disposal of treasury stock
(844)
844
0
0
Transactions with non-controlling interests and others
294
294
(1,522)
(1,228)
Balance at end of period
175,820
202,284
2,034,216
68,407
(2,924)
2,477,803
112,413
2,590,216
Condensed Quarterly Consolidated Statement of Cash Flows
(In millions of yen)
FY '19 9 months
(Apr. 1, 2018 - Dec. 31, 2018)
(A)
FY '20 9 months
(Apr. 1, 2019 - Dec. 31, 2019)
(B)
B - A
I
Cash flows from operating activities
1
Net profit
167,392
169,571
2,179
2
Adjustments to cash flows from operating activities
(1) Depreciation, amortization and other
126,739
153,160
26,421
(2) Decrease in trade receivables and contract assets
111,438
80,126
(31,312)
(3) Decrease (increase) in inventories
(128,291)
(45,901)
82,390
(4) Increase (decrease) in trade payables
(57,421)
(49,501)
7,920
(5) Others, net
(109,690)
(79,491)
30,199
Cash flows from operating activities
110,167
227,964
117,797
II
Cash flows from investing activities
1
Purchase of property, plant and equipment
(138,513)
(137,390)
1,123
2
Proceeds from sale of property, plant and equipment
3,689
13,647
9,958
3
Purchase of investment securities (net of cash acquired)
(10,315)
(18,162)
(7,847)
4
Proceeds from sale of investment securities (net of cash disposed)
4,747
10,372
5,625
5
Others, net
(11,139)
(16,791)
(5,652)
Cash flows from investing activities
(151,531)
(148,324)
3,207
I + II
Free cash flow
(41,364)
79,640
121,004
III
Cash flows from financing activities
1
Proceeds and repayment of bonds and long-term borrowings
(18,513)
(39,213)
(20,700)
2
Increase (decrease) in short-term borrowings, net
(950)
78,776
79,726
3
Repayments of lease liabilities
(6,888)
(39,589)
(32,701)
4
Dividends paid
(85,871)
(85,871)
0
5
Purchase of treasury stock
(1,054)
(785)
269
6
Disposal of treasury stock
0
0
(0)
7
Others, net
1,412
(5,120)
(6,532)
Cash flows from financing activities
(111,864)
(91,802)
20,062
IV
Effect of exchange rate changes on cash and cash equivalents
(2,486)
(2,995)
(509)
V
Net increase (decrease) in cash and cash equivalents
(155,714)
(15,157)
140,557
VI
Cash and cash equivalents at beginning of period
599,199
514,224
(84,975)
VII
Cash and cash equivalents at end of period
443,485
499,067
55,582
Consolidated Segment Information (First 9 Months, Fiscal 2020)
1. Revenue and Operating Profit by Business Segment
(In millions of yen)
Business Segment
FY '19 9 months
(Apr. 1, 2018 -
Dec. 31, 2018)
FY '20 9 months
(Apr. 1, 2019 -
Dec. 31, 2019)
C - A
D - B
C/A
(%)
Revenue (A)
Operating profit (B)
Revenue
(C)Operating profit (D)
Energy and Electric Systems
885,852
39,262
913,403
47,470
27,551
8,208
103
Industrial Automation Systems
1,094,255
114,096
1,016,042
58,937
(78,213)
(55,159)
93
Information and
Communication Systems
287,598
6,623
302,084
11,133
14,486
4,510
105
Electronic Devices
148,526
729
154,433
5,502
5,907
4,773
104
Home Appliances
806,071
50,711
830,754
69,700
24,683
18,989
103
Others
500,239
16,198
480,330
16,139
(19,909)
(59)
96
Subtotal
3,722,541
227,619
3,697,046
208,881
(25,495)
(18,738)
99
Eliminations and corporate
(458,416)
(26,179)
(446,917)
(26,624)
11,499
(445)
-
Consolidated Total
3,264,125
201,440
3,250,129
182,257
(13,996)
(19,183)
100
*Notes: 1) Inter-segment revenue are included in the above chart.
2) Income from sale of land within other profit (loss) presented in the 'Condensed Quarterly Consolidated Statement of Profit or Loss' is allocated to each segment.
2. Revenue by Location of Customers
(In millions of yen)
Location of Customers
FY '19 9 months
(Apr. 1, 2018 -
Dec. 31, 2018)
FY '20 9 months
(Apr. 1, 2019 -
Dec. 31, 2019)
B - A
B/A (%)
Revenue (A)
% of total revenue
Revenue (B)
% of total revenue
Japan
1,802,248
55.2
1,839,581
56.6
37,333
102
North America
313,960
9.6
325,165
10.0
11,205
104
Asia (excluding Japan)
761,257
23.3
703,360
21.6
(57,897)
92
China
373,921
11.5
334,181
10.3
(39,740)
89
Europe
339,744
10.4
335,174
10.3
(4,570)
99
Others
46,916
1.5
46,849
1.5
(67)
100
Total overseas revenue
1,461,877
44.8
1,410,548
43.4
(51,329)
96
Consolidated total
3,264,125
100.0
3,250,129
100.0
(13,996)
100
Consolidated Segment Information (Third Quarter, Fiscal 2020)
1. Revenue and Operating Profit by Business Segment
(In millions of yen)
Business Segment
FY '19 Q3
(Oct. 1, 2018 -
Dec. 31, 2018)
FY '20 Q3
(Oct. 1, 2019 -
Dec. 31, 2019)
C - A
D - B
C/A
(%)
Revenue (A)
Operating profit (loss) (B)
Revenue
(C)Operating profit (D)
Energy and Electric Systems
317,210
23,698
321,293
27,005
4,083
3,307
101
Industrial Automation Systems
363,905
36,117
329,776
17,665
(34,129)
(18,452)
91
Information and
Communication Systems
100,731
4,121
103,059
6,428
2,328
2,307
102
Electronic Devices
46,630
(540)
51,284
4,463
4,654
5,003
110
Home Appliances
248,951
17,046
248,992
16,494
41
(552)
100
Others
172,408
5,855
164,085
6,618
(8,323)
763
95
Subtotal
1,249,835
86,297
1,218,489
78,673
(31,346)
(7,624)
97
Eliminations and corporate
(155,816)
(10,797)
(150,888)
(10,646)
4,928
151
-
Consolidated Total
1,094,019
75,500
1,067,601
68,027
(26,418)
(7,473)
98
*Notes: 1) Inter-segment revenue are included in the above chart.
2) Income from sale of land within other profit (loss) presented in the 'Condensed Quarterly Consolidated Statement of Profit or Loss' is allocated to each segment.
2. Revenue by Location of Customers
(In millions of yen)
Location of Customers
FY '19 Q3
(Oct. 1, 2018 -
Dec. 31, 2018)
FY '20 Q3
(Oct. 1, 2019 -
Dec. 31, 2019)
B - A
B/A (%)
Revenue (A)
% of total revenue
Revenue (B)
% of total revenue
Japan
633,446
57.9
622,924
58.3
(10,522)
98
North America
104,106
9.5
95,407
8.9
(8,699)
92
Asia (excluding Japan)
232,936
21.3
233,601
21.9
665
100
China
108,634
9.9
112,451
10.5
3,817
104
Europe
106,619
9.7
99,112
9.3
(7,507)
93
Others
16,912
1.6
16,557
1.6
(355)
98
Total overseas revenue
460,573
42.1
444,677
41.7
(15,896)
97
Consolidated total
1,094,019
100.0
1,067,601
100.0
(26,418)
98
Notes to the Condensed Consolidated Financial Statements
(Notes regarding the going concern assumption)
Not applicable
(Notes if there is any significant change in Mitsubishi Electric Corp. stockholders' equity)
Not applicable
(Changes in Accounting Policies)
The Mitsubishi Electric Group has applied IFRS 16 Lease (hereafter "IFRS16") from the first quarter of the current fiscal year.
The Mitsubishi Electric Group had previously not capitalized leases classified as operating lease under IAS 17, but, by applying IFRS 16, introduced the single accounting model to capitalize lessee's lease in principle. For all leases other than leases that have a lease term of 12 months or less and leases for which the underlying asset is of low value, right-of-use assets that represent a right to use an underlying asset and lease liabilities that represent the obligation for lease payment were recognized as of the commencement date.
In the condensed quarterly consolidated statements of financial position, the Mitsubishi Electric Group has presented right-of-use assets as property, plant and equipment, and lease liabilities as bonds, borrowings and lease liabilities.
The Mitsubishi Electric Group has applied IFRS16 retroactively following transitional measures, and has recognized the cumulative effect as an adjustment to the beginning balance of retained earnings in the current fiscal year.
By applying IFRS 16, right-of-use assets and lease liabilities were newly increased by 93,066 million yen and 95,193 million yen respectively as of the date of the initial application (April 1, 2019). Accordingly, retained earnings were decreased by 1,521 million yen.
Cautionary Statement
The Mitsubishi Electric Group (hereafter "the Group") is involved in development, manufacture and sales in a wide range of fields including Energy and Electric Systems, Industrial Automation Systems, Information and Communication Systems, Electronic Devices and Home Appliances, and these operations extend globally, not only inside Japan, but also in North America, Europe, Asia and other regions. While the statements herein are based on certain assumptions and premises that the Group trusts and considers to be reasonable under the circumstances on the date of announcement, actual financial standings and operating results are subject to change due to any of the factors as contemplated hereunder and/or any additional factor unforeseeable as of the date of this announcement. Such factors materially affecting the expectations expressed herein shall include but are not limited to the following:
(1) Important trends
The Group's operations may be affected by trends in the global economy, social conditions, laws, tax codes and regulations.
(2) Foreign currency exchange rates
Fluctuations in foreign currency markets may affect the Group's sales of exported products and purchases of imported materials that are denominated in U.S. dollars or euros, as well as its Asian production bases' sales of exported products and purchases of imported materials that are denominated in foreign currencies.
(3) Stock markets
A fall in stock market prices may cause a decline in value of the Group's marketable securities and pension assets.
(4) Supply/demand balance for products and procurement conditions for materials and components
A decline in prices and shipments due to changes in the supply/demand balance, as well as an increase in material prices due to a worsening of material and component procurement conditions, may adversely affect the Group's performance.
(5) Fund raising
An increase in interest rates, the yen interest rate in particular, would increase the Group's interest expenses.
(6) Significant patent matters
Important patent filings, licensing, copyrights and patent-related disputes may adversely affect related businesses.
(7) Environmental legislation or relevant issues
The Group may incur losses or expenses owing to changes in environmental legislation or the occurrence of environmental issues. Such changes in legislation or the occurrence of environmental issues may also impact manufacturing and all corporate activities of the Group.
(8) Flaws or defects in products or services
The Group may incur losses or expenses resulting out of flaws or defects in products or services, and the lowered reputation of the quality of all its products and services may affect the entire Group.
(9) Litigation and other legal proceedings
The Group's operations may be affected by lawsuits or other legal proceedings against Mitsubishi Electric, its subsidiaries and/or equity-method associates and joint ventures.
(10) Disruptive changes
Disruptive changes in technology, development of products using new technology, timing of production and market introduction may adversely affect the Group's performance.
(11) Business restructuring
The Group may record losses due to restructuring measures.
(12) Information security
The performance of the Group may be affected by computer virus infections, unauthorized access and other unpredictable incidents that lead to the loss or leakage of personal information held by the Group or confidential information regarding the Group's business such as its technology, sales and other operations.
(13) Natural disasters
The Group's operations, particularly manufacturing activities, may be affected by the occurrence of earthquakes, typhoons, tsunami, fires and other large-scale disasters.
(14) Other significant factors
The Group's operations may be affected by the outbreak of social or political upheaval due to terrorism, war, pandemic by new strains of influenza and other diseases, or other factors.
###
About Mitsubishi Electric Corporation
With nearly 100 years of experience in providing reliable, high-quality products, Mitsubishi Electric Corporation (TOKYO: 6503) is a recognized world leader in the manufacture, marketing and sales of electrical and electronic equipment used in information processing and communications, space development and satellite communications, consumer electronics, industrial technology, energy, transportation and building equipment. Embracing the spirit of its corporate statement, Changes for the Better, and its environmental statement, Eco Changes, Mitsubishi Electric endeavors to be a global, leading green company, enriching society with technology. The company recorded a revenue of 4,519.9 billion yen (US$ 40.7 billion*) in the fiscal year ended March 31, 2019. For more information visit:
www.MitsubishiElectric.com
*At an exchange rate of 111 yen to the US dollar, the rate given by the Tokyo Foreign Exchange Market on March 31, 2019
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