31 Oct 2017 08:29
FOR IMMEDIATE RELEASE | No. 3144 |
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Mitsubishi Electric Announces Consolidated Financial Results for the First Half and Second Quarter of Fiscal 2018
TOKYO, October 31, 2017 - Mitsubishi Electric Corporation (TOKYO: 6503) announced today its consolidated financial results for the first half and second quarter, ended September 30, 2017, of the current fiscal year ending March 31, 2018 (fiscal 2018).
1. Consolidated Half-year Results (April 1, 2017 - September 30, 2017)
Net sales: | 2,076.3 | billion yen | (5% increase from the same period last year) |
Operating income: | 149.2 | billion yen | (23% increase from the same period last year) |
Income before income taxes: | 185.2 | billion yen | (50% increase from the same period last year) |
Net income attributable to Mitsubishi Electric Corp.: | 131.1 | billion yen | (48% increase from the same period last year) |
The business environment in the first half of fiscal 2018, from April through September 2017, experienced a buoyant expansion in the U.S. and gradual trends of recovery in Japan and Europe, despite a modest slowdown in China. 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.
Under these circumstances, consolidated net sales in the first half of fiscal 2018 increased by 5% compared to the same period of the previous fiscal year to 2,076.3 billion yen due primarily to increased sales in the Industrial Automation Systems, Electronic Devices and Home Appliances segments. Consolidated operating income increased by 23% compared to the same period of the previous fiscal year to 149.2 billion yen, due to increased profits in the Energy and Electric Systems, Industrial Automation Systems and Electronic Devices segments. Income before income taxes increased by 50% compared to the same period of the previous fiscal year to 185.2 billion yen due primarily to recording a gain from sales of investment securities in Renesas Electronics Corporation as well as improvement of exchange gains and losses. Net income attributable to Mitsubishi Electric Corporation increased by 48% compared to the same period of the previous fiscal year to 131.1 billion yen.
Consolidated Financial Results by Business Segment (First Half, Fiscal 2018)
Energy and Electric Systems
Total sales: | 527.8 | billion yen | (unchanged from the same period last year) |
Operating income: | 10.1 | billion yen | (0.9 billion yen increase from the same period last year) |
The social infrastructure systems business saw a decrease in both orders and sales from the same period of the previous fiscal year due primarily to decreases in orders of the transportation systems business in Japan as well as in sales of the power systems business in Japan, despite orders for large-scale projects in Japan in the power systems business.
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 remained substantially unchanged from the same period of the previous fiscal year. Operating income increased by 0.9 billion yen from the same period of the previous fiscal year due primarily to a shift in project portfolios.
Industrial Automation Systems
Total sales: | 703.7 | billion yen | (14% increase from the same period last year) |
Operating income: | 94.8 | billion yen | (32.7 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 stability in the car sales markets in Europe as well as Japanese car manufacturers experiencing increases in sales volume in China, in addition to the weaker yen.
As a result, total sales for this segment increased by 14% from the same period of the previous fiscal year. Operating income increased by 32.7 billion yen from the same period of the previous fiscal year due primarily to an increase in sales.
Information and Communication Systems
Total sales: | 185.0 | billion yen | (7% decrease from the same period last year) |
Operating income: | 2.8 | billion yen | (1.0 billion yen decrease 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 space 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 space systems business and the defense systems.
As a result, total sales for this segment decreased by 7% from the same period of the previous fiscal year. Operating income decreased by 1.0 billion yen from the same period of the previous fiscal year due primarily to a decrease in sales.
Electronic Devices
Total sales: | 99.5 | billion yen | (15% increase from the same period last year) |
Operating income: | 6.9 | billion yen | (5.1 billion yen increase from the same period last year) |
The electronic devices business saw a decrease in orders from the same period of the previous fiscal year due to a decrease in demand for optical communication devices, while sales increased by 15% compared to the same period of the previous fiscal year due to an increase in demand mainly for power modules used in industrial and consumer applications as well as the resolution of negative influences caused by the 2016 Kumamoto earthquakes in the previous fiscal year.
Operating income increased by 5.1 billion yen compared to the same period of the previous fiscal year due primarily to an increase in sales.
Home Appliances
Total sales: | 539.2 | billion yen | (4% increase from the same period last year) |
Operating income: | 38.4 | billion yen | (10.2 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 Japan, in addition to the weaker yen.
Operating income decreased by 10.2 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: | 362.3 | billion yen | (8% increase from the same period last year) |
Operating income: | 9.8 | billion yen | (0.4 billion yen increase 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 increased by 0.4 billion yen from the same period of the previous fiscal year due primarily to an increase in sales.
2. Consolidated Second-quarter Results (July 1, 2017 - September 30, 2017)
Net sales: | 1,070.7 | billion yen | (2% increase from the same period last year) |
Operating income: | 75.0 | billion yen | (21% increase from the same period last year) |
Income before income taxes: | 85.9 | billion yen | (37% increase from the same period last year) |
Net income attributable to Mitsubishi Electric Corp.: | 63.3 | billion yen | (40% increase from the same period last year) |
Consolidated net sales for this quarter, from July through September 2017, was 1,070.7 billion yen, a 2% increase from the same period of the previous fiscal year, due primarily to increased sales in the Industrial Automation Systems, Electronic Devices and Home Appliances segments.
Consolidated operating income was 75.0 billion yen, an increase of 21% from the same period of the previous fiscal year, with increased profits in the Industrial Automation Systems and Electronic Devices segments.
Consolidated Financial Results by Business Segment (Second Quarter, Fiscal 2018)
Energy and Electric Systems
Total sales: | 277.8 | billion yen | (3% decrease from the same period last year) |
Operating income: | 3.3 | billion yen | (1.9 billion yen decrease from the same period last year) |
The social infrastructure systems business saw a decrease in both orders and sales from the same period of the previous fiscal year due primarily to decreases in orders of the transportation systems business inside and outside Japan as well as in sales of the power systems business in Japan, despite orders for large-scale projects in Japan in the power systems business.
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 decreased by 3% from the same period of the previous fiscal year. Operating income decreased by 1.9 billion yen from the same period of the previous fiscal year due primarily to a decrease in sales.
Industrial Automation Systems
Total sales: | 352.8 | billion yen | (12% increase from the same period last year) |
Operating income: | 45.0 | billion yen | (15.3 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, organic light emitting diodes (OLED) mainly in Korea, 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 stability in the car sales markets in Europe as well as Japanese car manufacturers experiencing increases in sales volume in China, in addition to the weaker yen.
As a result, total sales for this segment increased by 12% from the same period of the previous fiscal year. Operating income increased by 15.3 billion yen from the same period of the previous fiscal year due primarily to an increase in sales.
Information and Communication Systems
Total sales: | 104.8 | billion yen | (16% decrease from the same period last year) |
Operating income: | 5.0 | billion yen | (2.0 billion yen decrease 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 IT infrastructure service 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 space 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 project portfolios in the defense systems business.
As a result, total sales for this segment decreased by 16% from the same period of the previous fiscal year. Operating income decreased by 2.0 billion yen from the same period of the previous fiscal year due primarily to a decrease in sales.
Electronic Devices
Total sales: | 51.4 | billion yen | (8% increase from the same period last year) |
Operating income: | 3.9 | billion yen | (3.1 billion yen increase from the same period last year) |
The electronic devices business saw a decrease in orders from the same period of the previous fiscal year due to a decrease in demand for optical communication devices, while sales increased by 8% compared to the same period of the previous fiscal year due to an increase in demand mainly for power modules used in consumer applications.
Operating income increased by 3.1 billion yen compared to the same period of the previous fiscal year due primarily to an increase in sales.
Home Appliances
Total sales: | 269.3 | billion yen | (5% increase from the same period last year) |
Operating income: | 14.3 | billion yen | (2.5 billion yen decrease from the same period last year) |
The home appliances business saw an increase in sales of 5% from the same period of the previous fiscal year due to an increase in sales of air conditioners for Europe, China and Japan, in addition to the weaker yen.
Operating income decreased by 2.5 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: | 191.7 | billion yen | (6% increase from the same period last year) |
Operating income: | 7.7 | billion yen | (0.9 billion yen increase from the same period last year) |
Sales increased by 6% 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 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 and equity on a consolidated basis
Total assets as of the end of this fiscal quarter decreased from the end of the previous fiscal year by 17.7 billion yen to 4,154.5 billion yen. The change in the balance of total assets is mainly attributable to increases in the balances of inventories by 99.0 billion yen as a result of work-in-process as recorded in commensurate with progress in job orders under pertinent contracts, while cash and cash equivalents decreased by 15.6 billion yen, and trade receivables decreased by 121.5 billion yen primarily as a result of credit collection.
Total liabilities decreased from the end of the previous fiscal year by 150.4 billion yen to 1,881.1 billion yen. The outstanding balances of debts and corporate bonds decreased by 13.5 billion yen from the end of the previous fiscal year to 338.5 billion yen, resulting in a decline in the ratio of interest bearing debt to total assets to 8.1%, representing a 0.3 point decrease compared to the end of the previous fiscal year. The outstanding balance of trade payables decreased by 118.4 billion yen, and retirement and severance benefits decreased by 12.5 billion yen, mainly resulting from an increase in pension assets following a rise in stock prices.
Mitsubishi Electric Corporation shareholders' equity increased by 130.9 billion yen compared to the end of the previous fiscal year to 2,170.5 billion yen. The shareholders' equity ratio was recorded at 52.2%, representing a 3.3 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 131.1 billion yen and accumulated other comprehensive income by 39.1 billion yen caused by such factors as the weaker yen and rising stock prices, despite a dividend payment of 38.6 billion yen.
An analysis on the status of cash flow on a consolidated basis
Cash flows from operating activities decreased by 68.9 billion yen compared to the same period of the previous fiscal year to 108.6 billion yen (cash in) due primarily to increases of payment for accounts payables. Cash flows from investing activities increased by 9.8 billion yen compared to the same period of the previous fiscal year to 68.7 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 39.8 billion yen (cash in). Cash flows from financing activities were 64.0 billion yen (cash out) mainly due to dividend payment.
Forecast for Fiscal 2018 (year ending March 31, 2018)
As a result of 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, have been revised from the announcement on July 31, 2017 as stated below.
Consolidated Earnings Forecast for Fiscal 2018
Consolidated | Previous forecast (announced July 31) | Current forecast | |
Net sales: | 4,370.0 billion yen | 4,390.0 billion yen | (4% increase from fiscal 2017) |
Operating income: | 300.0 billion yen | 315.0 billion yen | (17% increase from fiscal 2017) |
Income before income taxes: | 330.0 billion yen | 350.0 billion yen | (18% increase from fiscal 2017) |
Net income attributable to Mitsubishi Electric Corp.: | 235.0 billion yen | 250.0 billion yen | (19% increase from fiscal 2017) |
Exchange rates in and after the third quarter of fiscal 2018 is unchanged from the previous announcement at 105 yen to the U.S. dollar and 120 yen to the euro.
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 Half-year Results
(In billions of yen except where noted)
FY '17 1st half (A)(Apr. 1, 2016 - Sept. 30, 2016) | FY '18 1st half (B)(Apr. 1, 2017 - Sept. 30, 2017) | |||
B - A | B/A (%) | |||
Net sales | 1,972.3 | 2,076.3 | 103.9 | 105 |
Operating income | 121.7 | 149.2 | 27.5 | 123 |
Income before income taxes | 123.7 | 185.2 | 61.5 | 150 |
Net income attributable to Mitsubishi Electric Corp. | 88.3 | 131.1 | 42.7 | 148 |
Basic net income per share attributable to Mitsubishi Electric Corp. | 41.16 yen | 61.10 yen | 19.94 yen | 148 |
2. Consolidated Second-quarter Results
(In billions of yen except where noted)
FY '17 Q2 (A)(Jul. 1, 2016 -Sept. 30, 2016) | FY '18 Q2 (B)(Jul. 1, 2017 - Sept. 30, 2017) | |||
B - A | B/A (%) | |||
Net sales | 1,045.2 | 1,070.7 | 25.4 | 102 |
Operating income | 62.0 | 75.0 | 13.0 | 121 |
Income before income taxes | 62.7 | 85.9 | 23.2 | 137 |
Net income attributable to Mitsubishi Electric Corp. | 45.4 | 63.3 | 17.9 | 140 |
Basic net income per share attributable to Mitsubishi Electric Corp. | 21.17 yen | 29.54 yen | 8.37 yen | 140 |
Notes:
1) Consolidated financial charts made in accordance with U.S. GAAP.
2) The Company has 212 consolidated subsidiaries.
Consolidated Profit and Loss Statement (First Half, Fiscal 2018)
(In millions of yen)
FY '17 1st half (Apr. 1, 2016 - Sept. 30, 2016) | FY '18 1st half (Apr. 1, 2017 - Sept. 30, 2017) | ||||||
B - A | B/A (%) | ||||||
(A) | % of total | (B) | % of total | ||||
Net sales | 1,972,354 | 100.0 | 2,076,342 | 100.0 | 103,988 | 105 | |
Cost of sales | 1,358,355 | 68.9 | 1,412,241 | 68.0 | 53,886 | 104 | |
Selling, general and administrative expenses | 490,308 | 24.8 | 513,273 | 24.7 | 22,965 | 105 |
|
Loss on impairment of long-lived assets | 1,944 | 0.1 | 1,532 | 0.1 | (412) | 79 | |
Operating income | 121,747 | 6.2 | 149,296 | 7.2 | 27,549 | 123 | |
Other income | 35,843 | 1.8 | 41,701 | 2.0 | 5,858 | 116 | |
Interest and dividends | 4,262 | 0.2 | 4,885 | 0.2 | 623 | 115 | |
Equity in earnings of affiliated companies | 9,523 | 0.5 | 9,967 | 0.5 | 444 | 105 | |
Other | 22,058 | 1.1 | 26,849 | 1.3 | 4,791 | 122 | |
Other expenses | 33,864 | 1.7 | 5,754 | 0.3 | (28,110) | 17 | |
Interest | 1,562 | 0.1 | 1,439 | 0.1 | (123) | 92 | |
Other | 32,302 | 1.6 | 4,315 | 0.2 | (27,987) | 13 | |
Income before income taxes | 123,726 | 6.3 | 185,243 | 8.9 | 61,517 | 150 | |
Income taxes | 29,158 | 1.5 | 48,529 | 2.3 | 19,371 | 166 | |
Net income | 94,568 | 4.8 | 136,714 | 6.6 | 42,146 | 145 | |
Net income attributable to the noncontrolling interests | 6,226 | 0.3 | 5,590 | 0.3 | (636) | 90 | |
Net income attributable to Mitsubishi Electric Corp. | 88,342 | 4.5 | 131,124 | 6.3 | 42,782 | 148 | |
Consolidated Comprehensive Income Statement (First Half, Fiscal 2018)
(In millions of yen)
FY '17 1st half (A) (Apr. 1, 2016 - Sept. 30, 2016) | FY '18 1st half (B) (Apr. 1, 2017 - Sept. 30, 2017) | B - A | ||
Net income | 94,568 | 136,714 | 42,146 | |
Other comprehensive income (loss), net of tax | ||||
Foreign currency translation adjustments | (93,760) | 26,665 | 120,425 | |
Pension liability adjustments | (4,776) | 17,869 | 22,645 | |
Unrealized gains (losses) on securities | (20,191) | (3,296) | 16,895 | |
Unrealized gains (losses) on derivative instruments | (42) | (82) | (40) | |
Total | (118,769) | 41,156 | 159,925 | |
Comprehensive income (loss) | (24,201) | 177,870 | 202,071 | |
Comprehensive income (loss) attributable to the noncontrolling interests | (2,596) | 7,625 | 10,221 | |
Comprehensive income (loss) attributable to Mitsubishi Electric Corp. | (21,605) | 170,245 | 191,850 | |
Consolidated Profit and Loss Statement (Second Quarter, Fiscal 2018)
(In millions of yen)
FY '17 Q2 (Jul. 1, 2016 - Sept. 30, 2016) | FY '18 Q2 (Jul. 1, 2017 - Sept. 30, 2017) | ||||||
B - A | B/A (%) | ||||||
(A) | % of total | (B) | % of total | ||||
Net sales | 1,045,277 | 100.0 | 1,070,743 | 100.0 | 25,466 | 102 | |
Cost of sales | 730,852 | 69.9 | 731,009 | 68.3 | 157 | 100 | |
Selling, general andadministrative expenses | 250,438 | 24.0 | 263,152 | 24.6 | 12,714 | 105 | |
Loss on impairment of long-lived assets | 1,944 | 0.2 | 1,532 | 0.1 | (412) | 79 | |
Operating income | 62,043 | 5.9 | 75,050 | 7.0 | 13,007 | 121 | |
Other income | 9,303 | 0.9 | 13,387 | 1.2 | 4,084 | 144 | |
Interest and dividends | 1,401 | 0.1 | 1,298 | 0.1 | (103) | 93 | |
Equity in earnings of affiliated companies | 5,936 | 0.6 | 7,562 | 0.7 | 1,626 | 127 | |
Other | 1,966 | 0.2 | 4,527 | 0.4 | 2,561 | 230 | |
Other expenses | 8,629 | 0.8 | 2,442 | 0.2 | (6,187) | 28 | |
Interest | 803 | 0.1 | 762 | 0.1 | (41) | 95 | |
Other | 7,826 | 0.7 | 1,680 | 0.1 | (6,146) | 21 | |
Income before income taxes | 62,717 | 6.0 | 85,995 | 8.0 | 23,278 | 137 | |
Income taxes | 14,398 | 1.4 | 19,288 | 1.8 | 4,890 | 134 | |
Net income | 48,319 | 4.6 | 66,707 | 6.2 | 18,388 | 138 | |
Net income attributable to the noncontrolling interests | 2,891 | 0.3 | 3,327 | 0.3 | 436 | 115 | |
Net income attributable to Mitsubishi Electric Corp. | 45,428 | 4.3 | 63,380 | 5.9 | 17,952 | 140 | |
Consolidated Comprehensive Income Statement (Second Quarter, Fiscal 2018)
(In millions of yen)
FY '17 Q2 (A) (Jul. 1, 2016 - Sept. 30, 2016) | FY '18 Q2 (B) (Jul. 1, 2017 - Sept. 30, 2017) | B - A | ||
Net income | 48,319 | 66,707 | 18,388 | |
Other comprehensive income (loss), net of tax | ||||
Foreign currency translation adjustments | (26,216) | 21,945 | 48,161 | |
Pension liability adjustments | 10,064 | 5,392 | (4,672) | |
Unrealized gains on securities | 7,776 | 18,342 | 10,566 | |
Unrealized gains (losses) on derivative instruments | (8) | (19) | (11) | |
Total | (8,384) | 45,660 | 54,044 | |
Comprehensive income | 39,935 | 112,367 | 72,432 | |
Comprehensive income attributable to the noncontrolling interests | 865 | 5,113 | 4,248 | |
Comprehensive income attributable to Mitsubishi Electric Corp. | 39,070 | 107,254 | 68,184 | |
Consolidated Balance Sheet
(In millions of yen)
FY '17 (A) (ended Mar. 31, 2017) | FY ' 18 1st half (B) (ended Sept. 30, 2017) | B - A | |
(Assets) Current assets | 2,500,685 | 2,486,482 | (14,203) |
Cash and cash equivalents | 662,469 | 646,812 | (15,657) |
Trade receivables | 1,037,201 | 915,510 | (121,691) |
Inventories | 643,040 | 742,105 | 99,065 |
Prepaid expenses and other current assets | 157,975 | 182,055 | 24,080 |
Long-term trade receivables | 2,815 | 2,920 | 105 |
Investments | 618,935 | 614,786 | (4,149) |
Net property, plant and equipment | 732,611 | 755,261 | 22,650 |
Other assets | 317,224 | 295,060 | (22,164) |
Total assets | 4,172,270 | 4,154,509 | (17,761) |
(Liabilities) Current liabilities | 1,525,761 | 1,405,615 | (120,146) |
Bank loans and current portion of long-term debt | 124,368 | 121,647 | (2,721) |
Trade payables | 780,202 | 661,741 | (118,461) |
Other current liabilities | 621,191 | 622,227 | 1,036 |
Long-term debt | 227,756 | 216,945 | (10,811) |
Retirement and severance benefits | 194,990 | 182,432 | (12,558) |
Other fixed liabilities | 83,055 | 76,165 | (6,890) |
Total liabilities | 2,031,562 | 1,881,157 | (150,405) |
(Equity) Mitsubishi Electric Corp. shareholders' equity | 2,039,627 | 2,170,547 | 130,920 |
Common stock | 175,820 | 175,820 | － |
Capital surplus | 212,530 | 212,534 | 4 |
Retained earnings | 1,654,557 | 1,747,050 | 92,493 |
Accumulated other comprehensive income (loss) | (2,052) | 37,069 | 39,121 |
Treasury stock at cost | (1,228) | (1,926) | (698) |
Noncontrolling interests | 101,081 | 102,805 | 1,724 |
Total equity | 2,140,708 | 2,273,352 | 132,644 |
| Total liabilities and equity | 4,172,270 | 4,154,509 | (17,761) |
Balance of Debt | 352,124 | 338,592 | (13,532) |
Accumulated other comprehensive income (loss): | |||
Foreign currency translation adjustments | 18,535 | 43,223 | 24,688 |
Pension liability adjustments | (156,993) | (139,120) | 17,873 |
Unrealized gains on securities | 136,352 | 132,981 | (3,371) |
Unrealized gains (losses) on derivative instruments | 54 | (15) | (69) |
Consolidated Cash Flow Statement
(In millions of yen)
FY '17 1st half (Apr. 1, 2016 - Sept. 30, 2016) (A) | FY '18 1st half (Apr. 1, 2017 - Sept. 30, 2017) (B) | B - A | ||
I | Cash flows from operating activities | |||
1 | Net income | 94,568 | 136,714 | 42,146 |
2 | Adjustments to reconcile net income to net cash provided by operating activities | |||
(1) Depreciation of tangible fixed assets and other | 64,755 | 70,737 | 5,982 | |
(2) Decrease in trade receivables | 143,347 | 134,381 | (8,966) | |
(3) Decrease (increase) in inventories | (45,816) | (86,017) | (40,201) | |
(4) Increase (decrease) in trade payables | (78,220) | (114,192) | (35,972) | |
(5) Other, net | (1,045) | (33,014) | (31,969) | |
Net cash provided by operating activities | 177,589 | 108,609 | (68,980) | |
II | Cash flows from investing activities | |||
1 | Capital expenditure | (82,648) | (88,562) | (5,914) |
2 | Proceeds from sale of property, plant and equipment | 4,413 | 1,351 | (3,062) |
3 | Purchase of short-term investments and investment securities (net of cash acquired) | (2,385) | (3,915) | (1,530) |
4 | Proceeds from sale of short-term investments and investment securities (net of cash disposed) | 17,033 | 28,302 | 11,269 |
5 | Other, net | 4,630 | (5,949) | (10,579) |
Net cash used in investing activities | (58,957) | (68,773) | (9,816) | |
I+II Free cash flow | 118,632 | 39,836 | (78,796) | |
III | Cash flows from financing activities | |||
1 | Proceeds from long-term debt | 47 | 81 | 34 |
2 | Repayment of long-term debt | (30,939) | (14,455) | 16,484 |
3 | Increase (decrease) in bank loans, net | (2,830) | (3,568) | (738) |
4 | Dividends paid | (38,642) | (38,642) | 0 |
5 | Purchase of treasury stock | (1,095) | (698) | 397 |
6 | Reissuance of treasury stock | 0 | 0 | (0) |
7 | Other, net | (4,307) | (6,733) | (2,426) |
Net cash provided by (used in) financing activities | (77,766) | (64,015) | 13,751 | |
IV | Effect of exchange rate changes on cash and cash equivalents | (29,876) | 8,522 | 38,398 |
V | Net increase (decrease) in cash and cash equivalents | 10,990 | (15,657) | (26,647) |
VI | Cash and cash equivalents at beginning of period | 574,170 | 662,469 | 88,299 |
VII | Cash and cash equivalents at end of period | 585,160 | 646,812 | 61,652 |
Consolidated Segment Information (First Half, Fiscal 2018)
1. Sales and Operating Income by Business Segment
(In millions of yen)
Business Segment | FY '17 1st half (Apr. 1, 2016 - Sept. 30, 2016) | FY '18 1st half (Apr. 1, 2017 - Sept. 30, 2017) | C - A | D - B | C/A (%) | |||
Sales (A) | Operating income (B) | Sales (C) | Operating income (D) | |||||
Energy and Electric Systems | 525,471 | 9,182 | 527,886 | 10,109 | 2,415 | 927 | 100 | |
Industrial Automation Systems | 617,620 | 62,111 | 703,716 | 94,879 | 86,096 | 32,768 | 114 | |
Information and Communication Systems | 198,266 | 3,868 | 185,039 | 2,802 | (13,227) | (1,066) | 93 | |
Electronic Devices | 86,537 | 1,774 | 99,532 | 6,970 | 12,995 | 5,196 | 115 | |
Home Appliances | 519,397 | 48,668 | 539,250 | 38,460 | 19,853 | (10,208) | 104 | |
Others | 336,771 | 9,395 | 362,393 | 9,816 | 25,622 | 421 | 108 | |
Subtotal | 2,284,062 | 134,998 | 2,417,816 | 163,036 | 133,754 | 28,038 | 106 | |
Eliminations and other | (311,708) | (13,251) | (341,474) | (13,740) | (29,766) | (489) | - | |
Total | 1,972,354 | 121,747 | 2,076,342 | 149,296 | 103,988 | 27,549 | 105 | |
*Note: Inter-segment sales are included in the above chart.
2. Sales and Operating Income by Location
(In millions of yen)
Location | FY '17 1st half (Apr. 1, 2016 - Sept. 30, 2016) | FY '18 1st half (Apr. 1, 2017 - Sept. 30, 2017) | C - A | D - B | C/A (%) | ||
Sales (A) | Operating income (B) | Sales (C) | Operating income (D) | ||||
Japan | 1,540,435 | 48,362 | 1,601,928 | 80,068 | 61,493 | 31,706 | 104 |
North America | 203,856 | 4,120 | 209,347 | 7,812 | 5,491 | 3,692 | 103 |
Asia (excluding Japan) | 506,153 | 49,270 | 590,978 | 50,139 | 84,825 | 869 | 117 |
Europe | 213,063 | 8,643 | 237,193 | 8,934 | 24,130 | 291 | 111 |
Others | 22,019 | 877 | 22,852 | 911 | 833 | 34 | 104 |
Subtotal | 2,485,526 | 111,272 | 2,662,298 | 147,864 | 176,772 | 36,592 | 107 |
Eliminations | (513,172) | 10,475 | (585,956) | 1,432 | (72,784) | (9,043) | - |
Total | 1,972,354 | 121,747 | 2,076,342 | 149,296 | 103,988 | 27,549 | 105 |
*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 1st half (Apr. 1, 2016 - Sept. 30, 2016) | FY '18 1st half (Apr. 1, 2017 - Sept. 30, 2017) | B - A | B/A (%) | ||||
Sales (A) | % of total net sales | Sales (B) | % of total net sales | |||||
Japan | 1,081,895 | 54.9 | 1,076,438 | 51.8 | (5,457) | 99 | ||
North America | 202,738 | 10.3 | 208,752 | 10.1 | 6,014 | 103 | ||
Asia (excluding Japan) | 450,994 | 22.9 | 540,188 | 26.0 | 89,194 | 120 | ||
Europe | 196,446 | 9.9 | 214,323 | 10.3 | 17,877 | 109 | ||
Others | 40,281 | 2.0 | 36,641 | 1.8 | (3,640) | 91 | ||
Total overseas sales | 890,459 | 45.1 | 999,904 | 48.2 | 109,445 | 112 | ||
Consolidated total | 1,972,354 | 100.0 | 2,076,342 | 100.0 | 103,988 | 105 | ||
Consolidated Segment Information (Second Quarter, Fiscal 2018)
1. Sales and Operating Income by Business Segment
(In millions of yen)
Business Segment | FY '17 Q2 (Jul. 1, 2016 - Sept. 30, 2016) | FY '18 Q2 (Jul. 1, 2017 - Sept. 30, 2017) | C - A | D - B | C/A (%) | |||
Sales (A) | Operating income (B) | Sales (C) | Operating income (D) | |||||
Energy and Electric Systems | 287,420 | 5,256 | 277,800 | 3,311 | (9,620) | (1,945) | 97 | |
Industrial Automation Systems | 315,393 | 29,690 | 352,899 | 45,047 | 37,506 | 15,357 | 112 | |
Information and Communication Systems | 124,741 | 7,047 | 104,872 | 5,029 | (19,869) | (2,018) | 84 | |
Electronic Devices | 47,457 | 815 | 51,410 | 3,926 | 3,953 | 3,111 | 108 | |
Home Appliances | 257,472 | 16,882 | 269,358 | 14,334 | 11,886 | (2,548) | 105 | |
Others | 180,381 | 6,752 | 191,767 | 7,704 | 11,386 | 952 | 106 | |
Subtotal | 1,212,864 | 66,442 | 1,248,106 | 79,351 | 35,242 | 12,909 | 103 | |
Eliminations and other | (167,587) | (4,399) | (177,363) | (4,301) | (9,776) | 98 | - | |
Total | 1,045,277 | 62,043 | 1,070,743 | 75,050 | 25,466 | 13,007 | 102 | |
*Note: Inter-segment sales are included in the above chart.
2. Sales and Operating Income by Location
(In millions of yen)
Location | FY '17 Q2 (Jul. 1, 2016 - Sept. 30, 2016) | FY '18 Q2 (Jul. 1, 2017 - Sept. 30, 2017) | C - A | D - B | C/A (%) | ||
Sales (A) | Operating income (B) | Sales (C) | Operating income (D) | ||||
Japan | 845,720 | 30,416 | 845,328 | 43,118 | (392) | 12,702 | 100 |
North America | 101,731 | 507 | 103,272 | 3,539 | 1,541 | 3,032 | 102 |
Asia (excluding Japan) | 244,377 | 19,876 | 292,310 | 22,804 | 47,933 | 2,928 | 120 |
Europe | 102,370 | 4,492 | 112,797 | 3,698 | 10,427 | (794) | 110 |
Others | 11,012 | 434 | 12,691 | 501 | 1,679 | 67 | 115 |
Subtotal | 1,305,210 | 55,725 | 1,366,398 | 73,660 | 61,188 | 17,935 | 105 |
Eliminations | (259,933) | 6,318 | (295,655) | 1,390 | (35,722) | (4,928) | - |
Total | 1,045,277 | 62,043 | 1,070,743 | 75,050 | 25,466 | 13,007 | 102 |
*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 Q2 (Jul. 1, 2016 - Sept. 30, 2016) | FY '18 Q2 (Jul. 1, 2017 - Sept. 30, 2017) | B - A | B/A (%) | ||||
Sales (A) | % of total net sales | Sales (B) | % of total net sales | |||||
Japan | 610,307 | 58.4 | 576,721 | 53.9 | (33,586) | 94 | ||
North America | 101,209 | 9.7 | 103,210 | 9.6 | 2,001 | 102 | ||
Asia (excluding Japan) | 220,776 | 21.1 | 269,451 | 25.2 | 48,675 | 122 | ||
Europe | 92,950 | 8.9 | 102,259 | 9.5 | 9,309 | 110 | ||
Others | 20,035 | 1.9 | 19,102 | 1.8 | (933) | 95 | ||
Total overseas sales | 434,970 | 41.6 | 494,022 | 46.1 | 59,052 | 114 | ||
Consolidated total | 1,045,277 | 100.0 | 1,070,743 | 100.0 | 25,466 | 102 | ||
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'.
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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 4,238.6 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