FY2020 Financial Result from April 1, 2020 Through March 31, 2021
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FY2020 Financial Result From April 1, 2020 through March 31, 2021 TACHI-S CO.,LTD. May 27th, 2021 TTK2 Kai Concept X-3 “Driver’s Sofa” Securities Code: 7239 (Tokyo/First Section) 1/63 Corporate Overview Company Name TACHI-S CO., LTD. Corporate Headquarters 3-3-7, Matsubara-cho, Akishima-shi, Tokyo Date of Establishment April 7, 1954 Paid-in Capital 9.04 billion yen 198.5 billion yen (Consolidated) Net Sales (Fiscal Year Ended March 31, 2021) Number of Employees 12,421 (Consolidated) (As of March 31, 2021) Stock Exchange Listing Tokyo / First Section (Securities Code : 7239) Business Contents Manufacturing of automotive seats 2/63 Contents FY2020 Financial Result FY2021 Financial Forecast Mid-term Management Plan Business Strategy Financial and Capital Strategies Corporate Governance 3/63 Contents FY2020 Financial Result FY2021 Financial Forecast Mid-term Management Plan Business Strategy Financial and Capital Strategies Corporate Governance 4/63 Financial Result (Consolidated) (Unit: billion yen) vs. previous year (Amounts are rounded down) 2020/03 2021/03 Change Change(%) Net Sales 282.3 198.5 -83.8 -29.7 Operating Income -0.0 -7.7 -7.7 - Ordinary Income 1.0 -7.2 -8.3 - Net Income* -1.5 -13.7 -12.1 - 282.3 198.5 -0.0 -7.7 1.0 -7.2 -1.5 -13.7 20/03 21/03 Net Sales Operating Income Ordinary Income Net Income 5/63 Analysis of Increase / Decrease (Consolidated) (Unit: billion yen) vs. previous year Net Sales (Amounts are rounded down) COVID-19 impact 282.3 21/03 -43.2 198.5 Region Change Change(%) 88.4 Japan -39.1 -30.7% 29.3 North America -14.2 -32.6% 41.1 Latin America -16.4 -28.5% 0.5 Europe -1.0 -64.9% 37.7 China -10.5 -21.9% 1.1 Southeast Asia -2.3 -67.1% 20/03 21/03 Exchange 20/03 USD=¥109.13 RMB=¥15.86 Rate 21/03 USD=¥105.79 RMB=¥15.41 6/63 Analysis of Increase / Decrease (Consolidated) COVID-19 impact (Unit: billion yen) vs. previous year 21/03 -7.0 (Amounts are rounded down) Operating Income Net Income -7.7 Region Change -13.7 Region Change 0.0 Europe -0.0 0.0 Europe 0.0 -1.5 Equity method -0.1 -0.0 1.1 China -2.8 1.0 affiliates -2.0 Japan -1.7 -6.6 Japan -6.4 -2.1 North America -1.1 -1.9 North America -0.6 -4.0 Latin America -1.8 -5.4 Latin America -2.6 -0.0 China -1.9 -0.6 Southeast Asia -0.2 -0.5 Southeast Asia -0.2 20/03 21/03 20/03 21/03 7/63 FY2020 Results (Consolidated) (Unit: billion yen) vs previous forecast (Amounts are rounded down) 2021/03 2021/03 増減額 増減率(%)Change Released Actual Q1 Q2 Q3 Q4 Net Sales 187.0 198.5 37.9 41.6 58.3 60.5 11.5 Operating Income -9.0 -7.7 -5.5 -3.9 -0.0 1.8 1.2 Ordinary Income -10.5 -7.2 -7.0 -3.9 0.6 3.0 3.2 Net Income* -12.7 -13.7 -7.1 -5.8 0.1 -0.7 -1.0 <Summary for results ended in March, 2021> Impact of COVID-19 on sales from Q1 to Q2. Back on recovery track from Q3. Operating income recovered from Q3 through cost reduction and profit improvement activities to recover from decline in sales and revenues, and achieved profitability on a global basis in Q4. Japan, China, and Europe turned profitable in Q3, and Latin America turned profitable in Q4. Performance of affiliates (equity in earnings) also recovered in China and North America. Extraordinary gains and losses: Q2: 2.1 billion yen for special early retirement on TACHI-S non-consolidated basis. Q4: 2.7 billion yen for impairment loss on TACHI-S non-consolidated basis. 0.7 billion yen for business revitalization in Latin America. 8/63 Contents FY2020 Financial Result FY2021 Financial Forecast Mid-term Management Plan Business Strategy Financial and Capital Strategies Corporate Governance 9/63 Annual Forecasts (Consolidated) (Unit: billion yen) vs previous forecast (Amounts are rounded down) 21/03 22/03 Change Change(%) Net Sales 198.5 234.0 35.4 17.9 Operating Income -7.7 1.4 9.1 - Ordinary Income -7.2 1.8 9.0 - Net Income* -13.7 0.1 13.8 - <Summary for results ended in March, 2022> Net sales in Japan is forecasted to decrease by about 19 billion yen YoY due to the change in revenue recognition standard. Forecast revenue increase by 27% based on the old standard. Despite revenues in China are forecasted to decline due to the timing of model change, revenues in other major regions are forecasted to increase. Operating income to be profitable in the full year due to sales increase and initial positive impact from structural reform in Japan and Latin America started in FY2020. Japan and China are forecasted to be profitable. Although Latin America is not expected to return to positive, a significant improvement in profitability is expected. Affiliates (equity in earnings) are also forecasted to recover in earnings. Net income is forecasted to significantly improve in Japan, Latin America and other regions, where recorded restructuring costs in FY2020. 10/63 Analysis of Increase / Decrease (Consolidated) (Unit: billion yen) vs. previous year Net Sales (Amounts are rounded down) ( )Before correction of the impact 234.0 of revenue recognition standards (253.0) Region Change Change(%) 198.5 92.5 Japan 4.0 4.6% (111.5) (23.0) (26.1%) 48.1 North America 18.7 64.0% 53.6 Latin America 12.4 30.2% 0.5 Europe -0.0 -8.9% 36.8 China -0.8 -2.4% 2.2 Southeast Asia 1.1 95.9% 21/03 22/03 Exchange 21/03 USD=¥105.79 RMB=¥15.41 Rate 22/03 USD=¥108.00 RMB=¥16.50 11/63 Analysis of Increase / Decrease (Consolidated) (Unit: billion yen) vs. previous year (Amounts are rounded down) Operating Income Net Income 1.4 Region Change 0.1 Region Change 0.9 Japan 7.6 1.4 Japan 3.4 0.1 Europe 0.0 0.2 Latin America 4.2 0.7 China 0.8 Equity method -13.7 0.9 affiliates -0.0 2.1 China 0.9 -7.7 -1.5 North America 0.3 -1.7 North America 0.4 -0.6 Latin America 4.8 -0.4 Southeast Asia -0.1 Europe -0.1 0.1 -0.5 Southeast Asia 0.1 21/03 22/03 21/03 22/03 12/63 Contents FY2020 Financial Result FY2021 Financial Forecast Mid-term Management Plan Business Strategy Financial and Capital Strategies Corporate Governance 13/63 History Started as a seat manufacturer, TACHI-S has grown to a “Seat System Creator” with fully integrated development and production systems and then to a “Global Seat System Creator” providing our products the world over. Along with globalization of our customers, we have increased our sales. As the automotive industry enters a once-in-a-century transformation, however, the environment surrounding our company is changing drastically, and we must make changes in the way we do things or we are no longer able to envision our sustainable growth. In order to offer new value through our business activities and to survive as a truly independent company, we defined “Purpose of TACHI-S” and formulated a mid-term management plan for 2021 to 2024, tentatively named “Transformative Value Evolution (TVE)”. Sales 300.5 billion yen (2.6 times compared to 2004) Sales 113.8 billion yen Seat manufa cturer 2004~ 2009~ 2012~ 2016~ 2021~ Seat System Creator Global Seat System Creator Space Producer 14/63 Our Purpose Corporate Vision Bring smiles by continuously creating comfortable living spaces to enrich people’s lives in harmony with people and society Technology to support human posture with "safety, security and comfort" Technology to "combine" various materials Monozukuri capabilities to "deliver high-quality products on a global scale" We defined Purpose of Tachi-S (the axis of corporate activities) to provide social and economic value and to realize a sustainable society. Supporting People and the Earth through Seating Technology Supporting posture of people We will contribute to people's health and Quality of Life by providing comfort/safety/sense of security for sitting posture that occupies 30% of the day, and for various postures. Supporting people We will support all stakeholders and society through our business. Supporting the Earth Based on the spirit of "Mutual concession and cooperation" taught by our founder, we will maintain harmony with the Earth by addressing SDGs initiatives and contribute to the realization of a sustainable and environmentally friendly world. 15/63 Review on GT2020 Summary Quality Earning evaluations from markets, we won No.1 for 2 segments of the J.D. Power in North America in FY2018 and FY2019. In addition, we received two quality awards from our customers in each region in FY2016. Every year we received more awards and, we won nine quality awards in FY2020. Performance (billion yen) As our customers became more globalized, we Consolidated expanded production sites and increased production 3,500350 15.0% volume and sales. However, our production volume 295.5 300.5 decreased in line with the drop in global production 3,000300 282.5 282.3 volume from the latter half of FY2018. Although we have maintained 4% level of share in the global market, 10.0% our operating income ratio has decreased. 2,500250 198.5 2,000200 4.3% 4.3% 4.3% 4.4% Review 5.0% 1,500150 In expanding our global network, our development 4.0% for new models and support for manufacturing site 1,000100 3.1% 2.9% were implemented individually which resulted in 0.0% inefficient operations in receiving orders activities and 1.8% development and production preparation activities.