Cost increases resulting from fluctuations in material prices

「Cost ratio: 72.1% (an improvement of 0.4 percentage points year on year)」

「Operating income fell 44.4% year on year to ¥684,292 thousand as sales slowed and U.S. tariffs and purchase costs continued to rise.」

「As sales declined in both Japan and overseas, sales for the six-month consolidated period fell 14.3% year on year to ¥14,385,936 thousand. Although the cost ratio improved through reforms to the earnings structure, operating income fell 37.4% to ¥1,231,676 thousand as a result of the decline in sales.」

「Cost ratio improvement: 71.6% (improved by 2.4 percentage points year on year) Reforms to the earnings structure progressed as price revisions took hold in Japan and overseas and transportation costs normalized」

「In Japan, exports of products to group companies increased while product exports declined. Total sales fell 0.3% to ¥17,775,569 thousand, while operating income rose 63.5% year on year to ¥843,883 thousand as price revisions for the domestic market progressed.」

「In Japan, domestic sales remained firm and exports of components to overseas plants increased, while product exports declined. Total sales rose 1.1% year on year to ¥12,319,352 thousand, and operating income rose 52.0% to ¥630,977 thousand as revised selling prices finally began to take hold.」

「In the United States, sales performed well amid strong demand. Total sales increased 32.7% year on year to ¥2,304 million, while operating profit decreased 14.8% year on year to ¥195 million due to higher costs resulting from persistent inflation.」

「In Japan, component shortages continued despite firm demand. Domestic sales and exports of products and components to overseas plants all remained strong. Total sales rose 14.9% from the previous consolidated fiscal year to ¥24,556,607 thousand, while operating income fell 5.4% to ¥836,734 thousand as revisions to selling prices for the domestic market lagged behind higher costs.」

「In Japan, component shortages continued despite firm demand. Domestic sales and exports of products and components to overseas plants all remained strong. Total sales rose 6.3% year on year to ¥17,824,000 thousand, while operating income fell 43.6% to ¥516,154 thousand as the pass-through of higher costs into selling prices for the domestic market was delayed.」

「In Japan, supply capacity was insufficient because of component shortages despite firm demand. Domestic sales and exports of products and components to overseas plants all remained strong. Total sales rose 12.1% year on year to ¥12,182,277 thousand, while operating income fell 26.2% to ¥415,072 thousand as the pass-through of higher costs into selling prices was delayed.」

「In Japan, domestic sales remained firm, while exports of products and components to overseas plants increased. Total sales rose 11.9% year on year to ¥5,354,455 thousand, while operating income fell 9.2% to ¥90,806 thousand as the pass-through of higher costs into selling prices was delayed.」

「During the first nine months of the fiscal year under review (1 April 2021 to 31 December 2021), economic recovery in the With-COVID era progressed amid continued upheaval in social and economic conditions caused by the full-scale implementation of measures to address global warming and the sharpening of the U.S.-China Cold War structure, accompanied by side effects including structurally higher prices for energy and steel and other materials, soaring container shipping costs, and supply-chain disruptions.」

「During the first six months of the fiscal year under review (1 April 2021 to 30 September 2021), economic recovery in the With-COVID era advanced rapidly amid turbulent global conditions, as society underwent major changes triggered by COVID-19 and global warming. Digital transformation (DX) became fully established, global decarbonization policies (CN) accelerated along with energy and material price increases, supply chains were disrupted as economic activity resumed, and geopolitical tensions centered on the U.S.-China Cold War structure intensified further.」

「Amid rapidly changing global conditions, including supply chain disruptions and soaring component prices, economic recovery in the post-pandemic era has begun.」

「However, near-term pressure on the next period's performance is expected from the loss of special-demand sales, higher costs due to the stronger yen and fluctuations in material prices, and increased expenses associated with future growth-strategy investments.」