MEL.L Regulatory News (MEL)

Mitsubishi Electric Announces Consolidated Financial Results

for the First Quarter of Fiscal 2015

Tokyo, July 30, 2014 - Mitsubishi Electric Corporation (TOKYO: 6503) announced today its consolidated financial results for the first quarter ending June 30, 2014, of the current fiscal year ending March 31, 2015 (fiscal 2015).

Consolidated Financial Results

The business environment in the first quarter of the fiscal year 2015 as a whole saw ongoing gradual expansion around the world, owing to economic stability in the U.S., gradual economic recovery in Europe, a slightly mitigated slowdown in China and other factors, while the Japanese economy experienced an upward trend in the commercial sector despite a backlash due to the last-minute surge in demand experienced before the rise in consumption tax.

Under these circumstances, consolidated net sales in the first quarter increased by 9% compared to the same period of the previous fiscal year to 910.6 billion yen, owing to such factors as increased sales in the Energy and Electric Systems, Industrial Automation Systems, Electronic Devices and Home Appliances segments. Consolidated operating income increased by 73% compared to the same period of the previous fiscal year to 59.3 billion yen, due to higher profits in the Industrial Automation Systems, Electronic Devices and Home Appliances segments.

Consolidated Financial Results by Business Segment

Energy and Electric Systems

The social infrastructure systems business saw increases in both orders and sales compared to the same period of the previous fiscal year due primarily to growth in the transportation systems business outside Japan and the public utility systems business in Japan, despite decreases in the power systems business in Japan. The weaker yen also had a positive influence.

The building systems business experienced increases in both orders and sales compared to the same period of the previous fiscal year, owing to increases in new installations of elevators and escalators mainly in Japan, China and ASEAN countries, and owing in part to the weaker yen.

As a result, total sales for this segment increased by 3% from the same period of the previous fiscal year. Operating income decreased by 7.0 billion yen from the same period of the previous fiscal year due primarily to a shift in project portfolios and other factors.

Industrial Automation Systems

The factory automation systems business saw increases in both orders and sales from the same period of the previous fiscal year due to growth in capital expenditures relating to smartphone and automotive industries as well as facility replacements by manufacturers in Japan, and due additionally to the weaker yen.

The automotive equipment business saw increases in both orders and sales from the same period of the previous fiscal year primarily due to growth in the car sales markets outside Japan and an increase in electric power steering motors and controllers worldwide, and also due to the positive influence of the weaker yen.

As a result, total sales for this segment increased by 23% from the same period of the previous fiscal year. Operating income increased by 20.0 billion yen from the same period of previous fiscal year due primarily to an increase in sales.

Information and Communication Systems

The telecommunications equipment business saw decreases in both orders and sales from the same period of the previous fiscal year due primarily to a decrease in demand for communications infrastructure products.

The information systems and services business saw an increase in sales compared to the same period of the previous fiscal year, owing to growth in the system integrations business.

The electronic systems business saw decreases in both orders and sales from the same period of the previous fiscal year due primarily to a decrease in large projects for the electronic business.

As a result, total sales for this segment decreased by 11% from the same period of the previous fiscal year. Operating income declined by 0.8 billion yen from the same period of the previous fiscal year due toa decrease in sales and other factors.

Electronic Devices

The semiconductor business saw increases in both orders and sales from the same period of the previous fiscal year due to an increase in demand for power modules used in automotive, railcar, consumer and industrial applications, and due to the weaker yen.

The LCD module business saw an increase in orders due to increases in demand for both automotive and industrial-use products, while sales remained relatively unchanged compared to the same period of the previous fiscal year.

As a result, total sales for this segment increased by 21% from the same period of the previous fiscal year. Operating income increased by 2.6 billion yen from the same period of the previous fiscal year mainly due to an increase in sales.

Home Appliances

The home appliances business saw an increase in sales by 7% from the same period of the previous fiscal year due primarily to an increase in air conditioner sales in Asia, North America and Europe and in package air conditioners in Japan, and also due in part to the weaker yen, despite impact from the backlash due to the last-minute surge in demand experienced before the rise in consumption tax.

Operating income increased by 9.0 billion yen from the same period of the previous fiscal year largely due to an increase in sales.

Others

Sales increased by 19% from the same period of the previous fiscal year, mainly at affiliated companies involved in materials procurement.

Operating income increased by 0.9 billion yen from the same period of the previous fiscal year due primarily to an increase in sales.

Financial Standing

An analysis on the status of assets, liabilities, equity and cash flow on a consolidated basis

The Company's total assets for the fiscal quarter increased from the end of the previous fiscal year by 8.6 billion yen to 3,621.5 billion yen. The change in the balance of total assets was mainly attributable to an increase of cash and cash equivalents by 78.9 billion yen, an increase in inventories by 83.5 billion yen as a result of variation of the work-in-process as recorded in commensurate with progress in job orders under pertinent contracts, and a decrease of trade receivables by 178.5 billion yen as a result of credit collection.

Total liabilities decreased from the end of the previous fiscal year by 8.3 billion yen to 2,004.2 billion yen. The outstanding balance of debt and corporate bonds increased by 16.1 billion yen to 389.6 billion yen from the balance as of the end of the previous fiscal year, while the ratio of interest bearing debt to total assets was 10.8%, a 0.5-point increase compared to the end of the previous fiscal year. Trade payables decreased by 41.6 billion yen, and retirement and severance benefits decreased by 4.4 billion yendue primarily to an increase in pension assets resulting from a rise in stock prices and other factors.

Mitsubishi Electric Corporation shareholders' equity increased by 20.6 billion yen compared to the end of the previous fiscal year to 1,545.0 billion yen. Shareholders' equity ratio, showing a 0.5-point increase compared to the end of the previous fiscal year, reached 42.7%. This change mainly resulted from recording a consolidated net income attributable to Mitsubishi Electric Corporation of 43.0 billion yen, despite dividend payments of 23.6 billion yen.

Cash flow from operating activities for this quarter decreased by 53.4 billion yen to 128.6 billion yen (cash in), compared to the same period of the previous fiscal year. Cash flow from investing activities decreased by 1.0 billion yen compared to the same period of the previous fiscal year to 38.9 billion yen (cash out), due to a decrease in the purchase of investment securities. As a result, free cash flow totaled 89.7 billion yen (cash in). Cash flow from financing activities was 8.3 billion yen (cash out) primarily as a result of increases in bank loans and dividend payments.

Forecast for Fiscal 2015

With mainly the Industrial Automation Systems segment expected to see growth owing to increased demand for capital expenditures in Japan, China and other Asian countries, and due to an increase in car sales outside Japan, Mitsubishi Electric's business performance for the current fiscal year is expected to exceed its previous forecast. Therefore, the consolidated earnings forecast for the first half of fiscal 2015, ending September 30, 2014, and for fiscal 2015, ending March 31, 2015, have been revised from the announcement on April 28, 2014 as stated below.

First Half of Fiscal 2015 Consolidated Earnings Forecast

Fiscal 2015 Consolidated Earnings Forecast

 Consolidated Financial Results Summary

(In billions of yen except where noted)

Note: 1) Consolidated financial charts made in accordance with U.S. GAAP.

2) The Company has 172 consolidated subsidiaries.

Consolidated Profit and Loss Statement

 (In millions of yen)

Consolidated Comprehensive Income Statement

(In millions of yen)

Consolidated Balance Sheet

 (In millions of yen)

Consolidated Cash Flow Statement

 (In millions of yen)

Consolidated Segment Information

1. Sales and Operating Income by Business Segment

 (In millions of yen)

*Notes: Inter-segment sales are included in the above chart.

2. Sales and Operating Income by Location

(In millions of yen)

*Notes: Inter-segment sales are included in the above chart.

3. Sales by Location of Customers

(In millions of 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 Company trusts and considers to be reasonable under the circumstances on the date of announcement, actual 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 Mitsubishi Electric to record devaluation losses on marketable securities, or cause an increase in retirement benefit obligations in accordance with a decline in the fair value of 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 our 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 affiliated companies.

(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.

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About Mitsubishi Electric Corporation

With over 90 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 consolidated group sales of 4,054.3 billion yen (US$ 39.3 billion*) in the fiscal year ended March 31, 2014. For more information visit http://www.MitsubishiElectric.com

*At an exchange rate of 103 yen to the US dollar, the rate given by the Tokyo Foreign Exchange Market on March 31, 2014