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3rd Quarter Results

Fri, 2nd Feb 2018 08:55

RNS Number : 7582D
Mitsubishi Electric Corporation
02 February 2018

FOR IMMEDIATE RELEASE

No. 3167

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

prd.gnews@nk.MitsubishiElectric.co.jp

www.MitsubishiElectric.com/news/

Mitsubishi Electric Announces Consolidated Financial Results for the First 9 Months and Third Quarter of Fiscal 2018

TOKYO, February 2, 2018 - Mitsubishi Electric Corporation (TOKYO: 6503) announced today its consolidated financial results for the first 9 months and third quarter, ended December 31, 2017, of the current fiscal year ending March 31, 2018 (fiscal 2018).

1. Consolidated First 9 Months Results (April 1, 2017 - December 31, 2017)

Net sales:

3,115.0

billion yen

(6% increase from the same period last year)

Operating income:

232.4

billion yen

(32% increase from the same period last year)

Income before income taxes:

277.2

billion yen

(41% increase from the same period last year)

Net income attributable to Mitsubishi Electric Corp.:

193.1

billion yen

(43% increase from the same period last year)

In the first 9 months of fiscal 2018, from April through December 2017, the global economy saw a stable status in China, a buoyant expansion in the U.S. and gradual trends of recovery in Japan and Europe. In addition, the yen weakened against the U.S. dollar and the euro in and after May compared to the same period of the previous fiscal year, but became stronger against the U.S. dollar after the latter half of November.

Under these circumstances, consolidated net sales for the first 9 months of fiscal 2018 increased by 6% compared to the same period of the previous fiscal year to 3,115.0 billion yen due primarily to increased sales in the Energy and Electric Systems, Industrial Automation Systems, Electronic Devices and Home Appliances segments.

Consolidated operating income increased by 32% compared to the same period of the previous fiscal year to 232.4 billion yen, due to increased profits in the Energy and Electric Systems, Industrial Automation Systems, Information and Communication Systems and Electronic Devices segments.

Income before income taxes increased by 41% compared to the same period of the previous fiscal year to 277.2 billion yen, due primarily to an increased operating income, recording a gain from sales of investment securities in Renesas Electronics Corporation, and an improvement of exchange gains and losses.

Net income attributable to Mitsubishi Electric Corporation increased by 43% compared to the same period of the previous fiscal year to 193.1 billion yen.

Consolidated Financial Results by Business Segment (First 9 months, Fiscal 2018)

Energy and Electric Systems

Total sales:

805.3

billion yen

(3% increase from the same period last year)

Operating income:

26.6

billion yen

(12.8 billion yen increase from the same period last year)

The social infrastructure systems business saw a decrease in orders from the same period of the previous fiscal year due primarily to decreases in orders of the power systems business outside Japan as well as the transportation systems business in Japan, while sales remained substantially unchanged compared to the same period of the previous fiscal year.

The building systems business remained substantially unchanged in orders, while sales increased compared to the same period of the previous fiscal year due primarily to growth in the renewal business in Japan and the new installation of elevators and escalators outside Japan.

As a result, total sales for this segment increased by 3% from the same period of the previous fiscal year. Operating income increased by 12.8 billion yen from the same period of the previous fiscal year due primarily to a shift in project portfolios.

Industrial Automation Systems

Total sales:

1,070.5

billion yen

(12% increase from the same period last year)

Operating income:

147.6

billion yen

(45.0 billion yen increase from the same period last year)

The factory automation systems business saw increases in both orders and sales from the same period of the previous fiscal year due primarily to growth in capital expenditures in the fields of organic light emitting diodes (OLED) mainly in Korea, smartphones and electric cars in China as well as buoyancy in exports by machinery manufacturers in Japan.

The automotive equipment business saw increases in both orders and sales from the same period of the previous fiscal year, due primarily to increases in sales volume of Japanese car manufacturers in China, as well as the weaker yen, despite decreased car sales in North America.

As a result, total sales for this segment increased by 12% from the same period of the previous fiscal year. Operating income increased by 45.0 billion yen from the same period of the previous fiscal year due primarily to an increase in sales.

Information and Communication Systems

Total sales:

274.7

billion yen

(4% decrease from the same period last year)

Operating income:

6.2

billion yen

(1.7 billion yen increase from the same period last year)

The telecommunications equipment business saw decreases in both orders and sales compared to the same period of the previous fiscal year due primarily to decreased demand in communications infrastructure equipment.

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

The electronic systems business saw an increase in orders compared to the same period of the previous fiscal year due to an increase in large-scale projects in the defense systems business, while sales experienced a decrease compared to the same period of the previous fiscal year due primarily to a shift in large-scale projects in the defense systems and the space systems business.

As a result, total sales for this segment decreased by 4% from the same period of the previous fiscal year. Operating income increased by 1.7 billion yen from the same period of the previous fiscal year due primarily to a shift in project portfolios.

Electronic Devices

Total sales:

149.8

billion yen

(10% increase from the same period last year)

Operating income:

12.0

billion yen

(6.8 billion yen increase from the same period last year)

The electronic devices business saw an increase in orders from the same period of the previous fiscal year due to increases in demand for power modules used in consumer and industrial applications, and total sales increased by 10% compared to the same period of the previous fiscal year, despite a decrease in demand for optical communication devices.

Operating income increased by 6.8 billion yen compared to the same period of the previous fiscal year due primarily to an increase in sales.

Home Appliances

Total sales:

779.1

billion yen

(4% increase from the same period last year)

Operating income:

49.1

billion yen

(8.5 billion yen decrease from the same period last year)

The home appliances business saw an increase in sales of 4% from the same period of the previous fiscal year due to an increase in sales of air conditioners for Europe, China and the U.S., in addition to the weaker yen.

Operating income decreased by 8.5 billion yen compared to the same period of the previous fiscal year due primarily to increases in material prices and sales expenses.

Others

Total sales:

556.6

billion yen

(8% increase from the same period last year)

Operating income:

14.9

billion yen

(0.3 billion yen decrease from the same period last year)

Sales increased by 8% compared to the same period of the previous fiscal year due primarily to an increase in sales at affiliated companies involved in materials procurement.

Operating income decreased by 0.3 billion yen from the same period of the previous fiscal year due primarily to a shift in project portfolios.

2. Consolidated Third-quarter Results (October 1, 2017 - December 31, 2017)

Net sales:

1,038.6

billion yen

(7% increase from the same period last year)

Operating income:

83.1

billion yen

(54% increase from the same period last year)

Income before income taxes:

91.9

billion yen

(27% increase from the same period last year)

Net income attributable to Mitsubishi Electric Corp.:

61.9

billion yen

(32% increase from the same period last year)

Consolidated net sales for this quarter, from October through December 2017, was 1,038.6 billion yen, a 7% increase from the same period of the previous fiscal year, due to increased sales in all segments.

Consolidated operating income was 83.1 billion yen, an increase of 54% from the same period of the previous fiscal year, with increased profits in the Energy and Electric Systems, Industrial Automation Systems, Information and Communication Systems, Electronic Devices and Home appliances segments.

Income before income taxes increased by 27% compared to the same period of the previous fiscal year to 91.9 billion yen due primarily to an increased operating income despite a decrease of gain on foreign exchange in the same period of the previous fiscal year.

Net income attributable to Mitsubishi Electric Corporation increased by 32% compared to the same period of the previous fiscal year to 61.9 billion yen.

Consolidated Financial Results by Business Segment (Third Quarter, Fiscal 2018)

Energy and Electric Systems

Total sales:

277.4

billion yen

(7% increase from the same period last year)

Operating income:

16.5

billion yen

(11.9 billion yen increase from the same period last year)

The social infrastructure systems business remained substantially unchanged in orders, while sales increased compared to the same period of the previous fiscal year due primarily to growth in the power systems business, the public utility systems business, and the transportation systems in Japan.

The building systems business remained substantially unchanged in orders, while sales increased compared to the same period of the previous fiscal year due primarily to growth in the renewal business in Japan and the new installation of elevators and escalators outside Japan.

As a result, total sales for this segment increased by 7% from the same period of the previous fiscal year. Operating income increased by 11.9 billion yen from the same period of the previous fiscal year due primarily to an increase in sales.

Industrial Automation Systems

Total sales:

366.8

billion yen

(10% increase from the same period last year)

Operating income:

52.7

billion yen

(12.2 billion yen increase from the same period last year)

The factory automation systems business saw increases in both orders and sales from the same period of the previous fiscal year due primarily to growth in capital expenditures in the fields of smartphones and electric cars in China, and buoyancy in exports by machinery manufacturers in Japan.

The automotive equipment business saw increases in both orders and sales from the same period of the previous fiscal year due primarily to increases in sales volume of Japanese car manufacturers in China as well as the weaker yen, despite decreased car sales in North America.

As a result, total sales for this segment increased by 10% from the same period of the previous fiscal year. Operating income increased by 12.2 billion yen from the same period of the previous fiscal year due primarily to an increase in sales.

Information and Communication Systems

Total sales:

89.7

billion yen

(3% increase from the same period last year)

Operating income:

3.4

billion yen

(2.8 billion yen increase from the same period last year)

The telecommunications equipment business saw decreases in both orders and sales compared to the same period of the previous fiscal year due primarily to decreased demand in communications infrastructure equipment.

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

The electronic systems business saw increases in both orders and sales from the same period of the previous fiscal year due primarily to increases in orders for large-scale projects in the defense systems business as well as increases in sales by progress in orders already received for projects in the space systems business.

As a result, total sales for this segment increased by 3% from the same period of the previous fiscal year. Operating income increased by 2.8 billion yen from the same period of the previous fiscal year due primarily to a shift in project portfolios.

Electronic Devices

Total sales:

50.3

billion yen

(2% increase from the same period last year)

Operating income:

5.0

billion yen

(1.6 billion yen increase from the same period last year)

The electronic devices business saw an increase in orders from the same period of the previous fiscal year due to increases in demand for power modules used in industrial and automotive applications, and total sales increased by 2% compared to the same period of the previous fiscal year, despite a decrease in demand for optical communication devices.

Operating income increased by 1.6 billion yen compared to the same period of the previous fiscal year due primarily to an increase in sales.

Home Appliances

Total sales:

239.9

billion yen

(6% increase from the same period last year)

Operating income:

10.6

billion yen

(1.7 billion yen increase from the same period last year)

The home appliances business saw an increase in sales of 6% from the same period of the previous fiscal year due to an increase in sales of air conditioners for Europe, China and the U.S., in addition to the weaker yen.

Operating income increased by 1.7 billion yen compared to the same period of the previous fiscal year due primarily to an increases in sales.

Others

Total sales:

194.2

billion yen

(9% increase from the same period last year)

Operating income:

5.1

billion yen

(0.7 billion yen decrease from the same period last year)

Sales increased by 9% compared to the same period of the previous fiscal year due primarily to an increase in sales at affiliated companies involved in materials procurement.

Operating income decreased by 0.7 billion yen from the same period of the previous fiscal year due primarily to a shift in project portfolios.

Financial Standing

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

Total assets as of the end of this fiscal quarter increased from the end of the previous fiscal year by 11.7 billion yen to 4,184.0 billion yen. The change in the balance of total assets is mainly attributable to increases in the balance of inventories by 199.2 billion yen as a result of work-in-process as recorded in commensurate with progress in job orders under pertinent contracts, while trade receivables decreased by 135.8 billion yen primarily as a result of credit collection.

Total liabilities decreased from the end of the previous fiscal year by 208.4 billion yen to 1,823.1 billion yen. The outstanding balances of debts and corporate bonds decreased by 33.4 billion yen from the end of the previous fiscal year to 318.7 billion yen, resulting in a decline in the ratio of interest bearing debt to total assets to 7.6%, representing a 0.8 point decrease compared to the end of the previous fiscal year. The outstanding balance of trade payables decreased by 127.2 billion yen, and retirement and severance benefits decreased by 21.0 billion yen, mainly resulting from an increase in pension assets following a rise in stock prices.

Mitsubishi Electric Corporation shareholders' equity increased by 214.7 billion yen compared to the end of the previous fiscal year to 2,254.3 billion yen. The shareholders' equity ratio was recorded at 53.9%, representing a 5.0 point increase compared to the end of the previous fiscal year. These changes referred to above primarily result from recording a net income attributable to Mitsubishi Electric Corporation of 193.1 billion yen and accumulated other comprehensive income by 90.9 billion yen caused by such factors as the weaker yen and rising stock prices, despite a dividend payment of 68.6 billion yen.

An analysis on the status of cash flow on a consolidated basis

Cash flows from operating activities decreased by 59.9 billion yen compared to the same period of the previous fiscal year to 111.5 billion yen (cash in) due primarily to increases of inventories. Cash flows from investing activities increased by 29.6 billion yen compared to the same period of the previous fiscal year to 120.5 billion yen (cash out) due to increases in proceeds from the purchases of tangible fixed assets and other factors. As a result, free cash flow was 8.9 billion yen (cash out). Cash flows from financing activities were 116.3 billion yen (cash out) mainly due to dividend payment.

Forecast for Fiscal 2018 (year ending March 31, 2018)

As a result of the weaker yen as well as the growth expected in the Industrial Automation Systems segment in which it sees an increase in demand for capital expenditures mainly in Asia, the company's consolidated earnings forecast for fiscal 2018, ending March 31, 2018, has been revised from the announcement on October 31, 2017 as stated below.

Consolidated Earnings Forecast for Fiscal 2018

Consolidated

Previous forecast (announced Oct. 31)

Current forecast

Net sales:

4,390.0 billion yen

4,420.0 billion yen

(4% increase from fiscal 2017)

Operating income:

315.0 billion yen

325.0 billion yen

(20% increase from fiscal 2017)

Income before income taxes:

350.0 billion yen

370.0 billion yen

(25% increase from fiscal 2017)

Net income attributable to

Mitsubishi Electric Corp.:

250.0 billion yen

265.0 billion yen

(26% increase from fiscal 2017)

The exchange rate in the fourth quarter of fiscal 2018 remains unchanged from the previous announcement at 105 yen to the U.S. dollar, while the exchange rate to the euro has been revised to 125 yen, five yen weaker than the previous rate.

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 '17 9 months (A) (Apr. 1, 2016 - Dec. 31, 2016)

FY '18 9 months (B) (Apr. 1, 2017 - Dec. 31, 2017)

B - A

B/A

(%)

Net sales

2,947.1

3,115.0

167.8

106

Operating income

175.5

232.4

56.8

132

Income before income taxes

196.1

277.2

81.0

141

Net income attributable to Mitsubishi Electric Corp.

135.3

193.1

57.7

143

Basic net income per share attributable to Mitsubishi Electric Corp.

63. yen

90. yen

26. yen

143

2. Consolidated Third-quarter Results

(In billions of yen except where noted)

FY '17 Q3 (A) (Oct. 1, 2016 - Dec. 31, 2016)

FY '18 Q3 (B) (Oct. 1, 2017 - Dec. 31, 2017)

B - A

B/A

(%)

Net sales

974.7

1,038.6

63.9

107

Operating income

53.8

83.1

29.2

154

Income before income taxes

72.4

91.9

19.5

127

Net income attributable to Mitsubishi Electric Corp.

46.9

61.9

14.9

132

Basic net income per share attributable to Mitsubishi Electric Corp.

21. yen

28. yen

6. yen

132

Notes:

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

2) The Company has 204 consolidated subsidiaries.

Consolidated Profit and Loss Statement (First 9 Months, Fiscal 2018)

(In millions of yen)

FY '17 9 months

(Apr. 1, 2016 -

Dec. 31, 2016)

FY '18 9 months

(Apr. 1, 2017 -

Dec. 31, 2017)

B - A

B/A (%)

(A)

% of total

(B)

% of total

Net sales

2,947,113

100.0

3,115,012

100.0

167,899

106

Cost of sales

2,042,322

69.3

2,112,607

67.8

70,285

103

Selling, general and

administrative expenses

727,270

24.6

768,464

24.7

41,194

106

Loss on impairment of

long-lived assets

1,944

0.1

1,532

0.0

(412)

79

Operating income

175,577

6.0

232,409

7.5

56,832

132

Other income

46,646

1.6

51,587

1.6

4,941

111

Interest and dividends

6,330

0.2

7,247

0.2

917

114

Equity in earnings of affiliated companies

14,351

0.5

15,696

0.5

1,345

109

Other

25,965

0.9

28,644

0.9

2,679

110

Other expenses

26,028

0.9

6,769

0.2

(19,259)

26

Interest

2,154

0.1

2,044

0.1

(110)

95

Other

23,874

0.8

4,725

0.1

(19,149)

20

Income before income taxes

196,195

6.7

277,227

8.9

81,032

141

Income taxes

51,695

1.8

75,883

2.4

24,188

147

Net income

144,500

4.9

201,344

6.5

56,844

139

Net income attributable to

the noncontrolling interests

9,161

0.3

8,226

0.3

(935)

90

Net income attributable to Mitsubishi Electric Corp.

135,339

4.6

193,118

6.2

57,779

143

Consolidated Comprehensive Income Statement (First 9 Months, Fiscal 2018)

(In millions of yen)

FY '17

9 months (A)

(Apr. 1, 2016 - Dec. 31, 2016)

FY '18

9 months (B)

(Apr. 1, 2017 - Dec. 31, 2017)

B - A

Net income

144,500

201,344

56,844

Other comprehensive income (loss), net of tax

Foreign currency translation adjustments

(26,781)

43,830

70,611

Pension liability adjustments

23,386

40,693

17,307

Unrealized gains on securities

26,519

10,379

(16,140)

Unrealized gains (losses) on derivative instruments

182

(65)

(247)

Total

23,306

94,837

71,531

Comprehensive income

167,806

296,181

128,375

Comprehensive income attributable to

the noncontrolling interests

7,248

12,074

4,826

Comprehensive income attributable to

Mitsubishi Electric Corp.

160,558

284,107

123,549

Consolidated Profit and Loss Statement (Third Quarter, Fiscal 2018)

(In millions of yen)

FY '17 Q3

(Oct. 1, 2016 -

Dec. 31, 2016)

FY '18 Q3

(Oct. 1, 2017 -

Dec. 31, 2017)

B - A

B/A (%)

(A)

% of total

(B)

% of total

Net sales

974,759

100.0

1,038,670

100.0

63,911

107

Cost of sales

683,967

70.2

700,366

67.4

16,399

102

Selling, general and administrative expenses

236,962

24.3

255,191

24.6

18,229

108

Operating income

53,830

5.5

83,113

8.0

29,283

154

Other income

19,498

2.0

9,899

1.0

(9,599)

51

Interest and dividends

2,068

0.2

2,362

0.2

294

114

Equity in earnings of affiliated companies

4,828

0.5

5,729

0.6

901

119

Other

12,602

1.3

1,808

0.2

(10,794)

14

Other expenses

859

0.1

1,028

0.1

169

120

Interest

592

0.1

605

0.1

13

102

Other

267

0.0

423

0.0

156

158

Income before income taxes

72,469

7.4

91,984

8.9

19,515

127

Income taxes

22,537

2.3

27,354

2.7

4,817

121

Net income

49,932

5.1

64,630

6.2

14,698

129

Net income attributable to

the noncontrolling interests

2,935

0.3

2,636

0.2

(299)

90

Net income attributable to Mitsubishi Electric Corp.

46,997

4.8

61,994

6.0

14,997

132

Consolidated Comprehensive Income Statement (Third Quarter, Fiscal 2018)

(In millions of yen)

FY '17 Q3 (A)

(Oct. 1, 2016 -

Dec. 31, 2016)

FY '18 Q3 (B)

(Oct. 1, 2017 -

Dec. 31, 2017)

B - A

Net income

49,932

64,630

14,698

Other comprehensive income (loss), net of tax

Foreign currency translation adjustments

66,979

17,165

(49,814)

Pension liability adjustments

28,162

22,824

(5,338)

Unrealized gains on securities

46,710

13,675

(33,035)

Unrealized gains on derivative instruments

224

17

(207)

Total

142,075

53,681

(88,394)

Comprehensive income

192,007

118,311

(73,696)

Comprehensive income attributable to

the noncontrolling interests

9,844

4,449

(5,395)

Comprehensive income attributable to

Mitsubishi Electric Corp.

182,163

113,862

(68,301)

Consolidated Balance Sheet

(In millions of yen)

FY '17 (A)

(ended Mar. 31, 2017)

FY ' 18

9 months (B)

(ended Dec. 31, 2017)

B - A

(Assets)

Current assets

2,500,685

2,490,034

(10,651)

Cash and cash equivalents

662,469

551,670

(110,799)

Trade receivables

1,037,201

902,389

(134,812)

Inventories

643,040

842,281

199,241

Prepaid expenses and other current assets

157,975

193,694

35,719

Long-term trade receivables

2,815

1,798

(1,017)

Investments

618,935

671,641

52,706

Net property, plant and equipment

732,611

757,869

25,258

Other assets

317,224

262,658

(54,566)

Total assets

4,172,270

4,184,000

11,730

(Liabilities)

Current liabilities

1,525,761

1,368,433

(157,328)

Bank loans and current portion of long-term debt

124,368

110,782

(13,586)

Trade payables

780,202

652,998

(127,204)

Other current liabilities

621,191

604,653

(16,538)

Long-term debt

227,756

207,935

(19,821)

Retirement and severance benefits

194,990

173,911

(21,079)

Other fixed liabilities

83,055

72,824

(10,231)

Total liabilities

2,031,562

1,823,103

(208,459)

(Equity)

Mitsubishi Electric Corp. shareholders' equity

2,039,627

2,254,351

214,724

Common stock

175,820

175,820

-

Capital surplus

212,530

212,543

13

Retained earnings

1,654,557

1,778,978

124,421

Accumulated other comprehensive income (loss)

(2,052)

88,937

90,989

Treasury stock at cost

(1,228)

(1,927)

(699)

Noncontrolling interests

101,081

106,546

5,465

Total equity

2,140,708

2,360,897

220,189

Total liabilities and equity

4,172,270

4,184,000

11,730

Balance of Debt

352,124

318,717

(33,407)

Accumulated other comprehensive income (loss):

Foreign currency translation adjustments

18,535

58,591

40,056

Pension liability adjustments

(156,993)

(116,271)

40,722

Unrealized gains on securities

136,352

146,615

10,263

Unrealized gains on derivative instruments

54

2

(52)

Consolidated Cash Flow Statement

(In millions of yen)

FY '17 9 months

(Apr. 1, 2016 - Dec. 31, 2016)

(A)

FY '18 9 months

(Apr. 1, 2017 - Dec. 31, 2017)

(B)

B - A

I

Cash flows from operating activities

1

Net income

144,500

201,344

56,844

2

Adjustments to reconcile net income to net cash provided by operating activities

(1) Depreciation of tangible fixed assets and other

101,452

111,271

9,819

(2) Decrease in trade receivables

149,645

152,385

2,740

(3) Decrease (increase) in inventories

(118,535)

(181,672)

(63,137)

(4) Increase (decrease) in trade payables

(60,735)

(117,293)

(56,558)

(5) Other, net

(44,790)

(54,491)

(9,701)

Net cash provided by operating activities

171,537

111,544

(59,993)

II

Cash flows from investing activities

1

Capital expenditure

(114,351)

(135,221)

(20,870)

2

Proceeds from sale of property, plant and equipment

6,194

2,204

(3,990)

3

Purchase of short-term investments and investment securities (net of cash acquired)

(3,906)

(6,701)

(2,795)

4

Proceeds from sale of short-term investments and investment securities (net of cash disposed)

19,181

29,729

10,548

5

Other, net

2,017

(10,524)

(12,541)

Net cash used in investing activities

(90,865)

(120,513)

(29,648)

I+II Free cash flow

80,672

(8,969)

(89,641)

III

Cash flows from financing activities

1

Proceeds from long-term debt

147

180

33

2

Repayment of long-term debt

(33,074)

(36,710)

(3,636)

3

Increase (decrease) in bank loans, net

(652)

(2,998)

(2,346)

4

Dividends paid

(57,963)

(68,696)

(10,733)

5

Purchase of treasury stock

(1,096)

(699)

397

6

Reissuance of treasury stock

0

0

(0)

7

Other, net

(5,154)

(7,419)

(2,265)

Net cash provided by (used in) financing activities

(97,792)

(116,342)

(18,550)

IV

Effect of exchange rate changes on cash and cash equivalents

(2,598)

14,512

17,110

V

Net increase (decrease) in cash and cash equivalents

(19,718)

(110,799)

(91,081)

VI

Cash and cash equivalents at beginning of period

574,170

662,469

88,299

VII

Cash and cash equivalents at end of period

554,452

551,670

(2,782)

Consolidated Segment Information (First 9 Months, Fiscal 2018)

1. Sales and Operating Income by Business Segment

(In millions of yen)

Business Segment

FY '17 9 months

(Apr. 1, 2016 -

Dec. 31, 2016)

FY '18 9 months

(Apr. 1, 2017 -

Dec. 31, 2017)

C - A

D - B

C/A

(%)

Sales (A)

Operating income (B)

Sales (C)

Operating income (D)

Energy and Electric Systems

784,744

13,758

805,347

26,639

20,603

12,881

103

Industrial Automation

Systems

951,988

102,569

1,070,518

147,608

118,530

45,039

112

Information and

Communication Systems

285,462

4,451

274,789

6,249

(10,673)

1,798

96

Electronic Devices

135,850

5,116

149,860

12,000

14,010

6,884

110

Home Appliances

746,404

57,625

779,163

49,118

32,759

(8,507)

104

Others

514,571

15,297

556,657

14,997

42,086

(300)

108

Subtotal

3,419,019

198,816

3,636,334

256,611

217,315

57,795

106

Eliminations and other

(471,906)

(23,239)

(521,322)

(24,202)

(49,416)

(963)

-

Total

2,947,113

175,577

3,115,012

232,409

167,899

56,832

106

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

2. Sales and Operating Income by Location

(In millions of yen)

Location

FY '17 9 months

(Apr. 1, 2016 -

Dec. 31, 2016)

FY '18 9 months

(Apr. 1, 2017 -

Dec. 31, 2017)

C - A

D - B

C/A

(%)

Sales (A)

Operating income (B)

Sales (C)

Operating income (D)

Japan

2,325,814

86,041

2,427,796

141,524

101,982

55,483

104

North America

302,591

4,809

306,163

8,543

3,572

3,734

101

Asia (excluding Japan)

756,770

69,912

880,208

71,866

123,438

1,954

116

Europe

313,419

11,023

352,851

11,426

39,432

403

113

Others

33,751

1,740

37,908

1,950

4,157

210

112

Subtotal

3,732,345

173,525

4,004,926

235,309

272,581

61,784

107

Eliminations

(785,232)

2,052

(889,914)

(2,900)

(104,682)

(4,952)

-

Total

2,947,113

175,577

3,115,012

232,409

167,899

56,832

106

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

3. Sales by Location of Customers

(In millions of yen)

Location of Customers

FY '17 9 months

(Apr. 1, 2016 -

Dec. 31, 2016)

FY '18 9 months

(Apr. 1, 2017 -

Dec. 31, 2017)

B - A

B/A (%)

Sales (A)

% of total net sales

Sales (B)

% of total net sales

Japan

1,616,573

54.9

1,625,632

52.2

9,059

101

North America

304,670

10.3

306,423

9.8

1,753

101

Asia

(excluding Japan)

680,074

23.1

803,635

25.8

123,561

118

Europe

286,728

9.7

319,113

10.3

32,385

111

Others

59,068

2.0

60,209

1.9

1,141

102

Total overseas sales

1,330,540

45.1

1,489,380

47.8

158,840

112

Consolidated total

2,947,113

100.0

3,115,012

100.0

167,899

106

Consolidated Segment Information (Third Quarter, Fiscal 2018)

1. Sales and Operating Income by Business Segment

(In millions of yen)

Business Segment

FY '17 Q3

(Oct. 1, 2016 -

Dec. 31, 2016)

FY '18 Q3

(Oct. 1, 2017 -

Dec. 31, 2017)

C - A

D - B

C/A

(%)

Sales (A)

Operating income (B)

Sales (C)

Operating income (D)

Energy and Electric

Systems

259,273

4,576

277,461

16,530

18,188

11,954

107

Industrial Automation

Systems

334,368

40,458

366,802

52,729

32,434

12,271

110

Information and

Communication Systems

87,196

583

89,750

3,447

2,554

2,864

103

Electronic Devices

49,313

3,342

50,328

5,030

1,015

1,688

102

Home Appliances

227,007

8,957

239,913

10,658

12,906

1,701

106

Others

177,800

5,902

194,264

5,181

16,464

(721)

109

Subtotal

1,134,957

63,818

1,218,518

93,575

83,561

29,757

107

Eliminations and other

(160,198)

(9,988)

(179,848)

(10,462)

(19,650)

(474)

-

Total

974,759

53,830

1,038,670

83,113

63,911

29,283

107

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

2. Sales and Operating Income by Location

(In millions of yen)

Location

FY '17 Q3

(Oct. 1, 2016 -

Dec. 31, 2016)

FY '18 Q3

(Oct. 1, 2017 -

Dec. 31, 2017)

C - A

D - B

C/A

(%)

Sales (A)

Operating income (B)

Sales (C)

Operating income (D)

Japan

785,379

37,679

825,868

61,456

40,489

23,777

105

North America

98,735

689

96,816

731

(1,919)

42

98

Asia (excluding Japan)

250,617

20,642

289,230

21,727

38,613

1,085

115

Europe

100,356

2,380

115,658

2,492

15,302

112

115

Others

11,732

863

15,056

1,039

3,324

176

128

Subtotal

1,246,819

62,253

1,342,628

87,445

95,809

25,192

108

Eliminations

(272,060)

(8,423)

(303,958)

(4,332)

(31,898)

4,091

-

Total

974,759

53,830

1,038,670

83,113

63,911

29,283

107

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

3. Sales by Location of Customers

(In millions of yen)

Location of Customers

FY '17 Q3

(Oct. 1, 2016 -

Dec. 31, 2016)

FY '18 Q3

(Oct. 1, 2017 -

Dec. 31, 2017)

B - A

B/A (%)

Sales (A)

% of total net sales

Sales (B)

% of total net sales

Japan

534,678

54.9

549,194

52.9

14,516

103

North America

101,932

10.4

97,671

9.4

(4,261)

96

Asia

(excluding Japan)

229,080

23.5

263,447

25.3

34,367

115

Europe

90,282

9.3

104,790

10.1

14,508

116

Others

18,787

1.9

23,568

2.3

4,781

125

Total overseas sales

440,081

45.1

489,476

47.1

49,395

111

Consolidated total

974,759

100.0

1,038,670

100.0

63,911

107

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 the Group 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 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 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.

Notes

1. Change in the accounting policy

On April 1, 2017, the Company adopted Accounting Standards Update 2015-17 "Balance Sheet Classification of Deferred Taxes" issued by the Financial Accounting Standards Board. To reflect this adoption, all deferred tax assets and liabilities have been classified as noncurrent in the consolidated balance sheets and subsequently, deferred tax assets and liabilities in the same tax-paying component or tax jurisdiction were offset. The consolidated balance sheet as of March 31, 2017 has been reclassified to reflect this adoption and accordingly, deferred tax assets previously included in 'Prepaid expenses and other current assets' and deferred tax liabilities previously included in 'Other liabilities' have been reclassified as 'Other assets'.

###

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 4,238.6 billion yen (US$ 37.8 billion*) in the fiscal year ended March 31, 2017. For more information visit:

http://www.MitsubishiElectric.com

*At an exchange rate of 112 yen to the US dollar, the rate given by the Tokyo Foreign Exchange Market on March 31, 2017

Click on, or paste the following link into your web browser, to view the associated PDF document.

http://www.rns-pdf.londonstockexchange.com/rns/7582D_-2018-2-2.pdf

This information is provided by RNS
The company news service from the London Stock Exchange
END
QRTGIGDDUSGBGID
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