Expansion of the European Platform through the Conversion of Operations in Spain and Italy into Subsidiaries

「In Europe and Africa, net sales increased due to higher sales from new orders and increased revenue from the newly consolidated Act Group, among other factors, resulting in net sales of ¥19,035 million, up ¥6,450 million, or 51.3%, year on year. Operating income was ¥298 million, due to improved profitability accompanying the start of mass production of newly ordered products and increased revenue from the newly consolidated Act Group, among other factors, compared with an operating loss of ¥152 million in the same period of the previous year.」

「In Europe, sales declined year on year in all areas except the Czech Republic, partly due to lower automobile production in Europe, resulting in net sales of ¥12,584 million, down ¥2,959 million, or 19.0%, year on year. Despite efforts to reduce costs and improve productivity, operating losses were recorded in all areas except the Czech Republic and Hungary, resulting in an operating loss of ¥152 million, compared with an operating loss of ¥15 million in the same period of the previous year.」

「In Europe, production volumes at major customers increased mainly in Serbia and the Czech Republic, partly offsetting the impact of lower production at major customers in Hungary and Italy. The weaker yen also increased the yen-converted amounts, among other factors, resulting in net sales of ¥29,059 million, up ¥707 million, or 2.5%, year on year. Operating income was ¥449 million, due to increased capacity utilization accompanying higher sales, cost reductions and other factors, compared with an operating loss of ¥461 million in the same period of the previous year.」

「HI-LEX CABLE SYSTEM CO.,LTD., formerly a consolidated subsidiary, has been excluded from the scope of consolidation from the second-quarter consolidated accounting period because its liquidation was completed.」

「In Europe, the overall impact of semiconductor supply shortages declined, and sales remained firm, particularly at subsidiaries other than the Spanish subsidiary. The weaker yen also increased the yen-converted amounts, among other factors, resulting in net sales of ¥7,965 million, up ¥1,733 million, or 27.8%, year on year. Operating income was affected by increased capacity utilization accompanying higher sales and other factors, and although the loss increased from the previous year, it was limited to an operating loss of ¥20 million, compared with an operating loss of ¥358 million in the same period of the previous year.」

「Despite higher material and transportation costs and other factors, profitability improved through measures including a review of the pricing strategy, mainly at the Hungarian and Italian subsidiaries, resulting in an operating loss of ¥461 million, compared with an operating loss of ¥1,922 million in the same period of the previous year.」

「In Europe, although the semiconductor supply shortage continued to have an impact, production volumes at major customers increased, particularly at the Italian, Hungarian and Czech subsidiaries. The weaker yen also increased the yen-converted amounts, among other factors, resulting in net sales of ¥21,516 million, up ¥7,736 million, or 56.1%, year on year. Despite higher material and transportation costs and other factors, operating income improved through measures including a review of the pricing strategy, mainly at the Hungarian and Italian subsidiaries, resulting in operating income of ¥3 million, compared with an operating loss of ¥1,633 million in the same period of the previous year.」

「In Europe, although the Russia business was affected by the conflict in Ukraine, the impact of semiconductor supply shortages declined overall. Sales remained firm, particularly at the Italian, Hungarian and Czech subsidiaries, and the weaker yen also increased the yen-converted amounts, resulting in net sales of ¥6,232 million, up ¥1,993 million, or 47.0%, year on year. Despite efforts to reduce costs and improve productivity, operating income was affected by higher material costs and other factors, mainly at the Hungarian and Czech subsidiaries, resulting in an operating loss of ¥358 million, compared with an operating loss of ¥415 million in the same period of the previous year.」

「In Europe, sales remained sluggish, mainly at the Hungarian and Italian subsidiaries, partly because of production cuts by customers caused by the semiconductor shortage. Revenue was ¥13,779 million, down ¥21 million, or 0.2%, year on year. Despite efforts to reduce costs and improve productivity, operating loss was ¥1,633 million, compared with an operating loss of ¥1,278 million in the same period of the previous year, due mainly to higher material and transportation costs at the Czech, Hungarian, Spanish and Russian subsidiaries.」

「In Europe, although production cuts by customers due to the semiconductor shortage and the renewed spread of the infectious disease in some regions were downside factors, sales increased sharply, mainly at the German and Russian subsidiaries, while sales remained sluggish, mainly at the Italian and Hungarian subsidiaries. As a result, revenue was ¥4,238 million, down ¥530 million, or 11.1%, year on year. Despite efforts to reduce costs and improve productivity, operating loss was ¥415 million, compared with an operating loss of ¥393 million in the same period of the previous year, due partly to higher material and transportation costs, mainly at the Russian, Hungarian, Italian and Spanish subsidiaries, and costs related to starting operations at the Czech subsidiary.」

「In Europe, although some regions were affected by the renewed spread of the infectious disease, revenue was ¥13,801 million, up ¥3,340 million, or 31.9%, year on year, as sales increased sharply, mainly at the Hungarian, Italian, Spanish and Czech subsidiaries. Despite efforts to reduce costs and improve productivity, operating loss was ¥1,278 million, compared with an operating loss of ¥1,621 million in the same period of the previous year, due partly to costs related to starting operations at the Czech subsidiary and higher material and transportation costs, mainly at the Russian, Spanish and Hungarian subsidiaries.」

「In Europe, despite the impact of the renewed spread of COVID-19, revenue was ¥9,596 million, up ¥1,099 million, or 12.9%, year on year, as sales increased sharply, mainly at the Hungarian, Italian and Spanish subsidiaries. Despite efforts to reduce costs and improve productivity, operating loss was ¥785 million, compared with an operating loss of ¥908 million in the same period of the previous year, due partly to costs related to starting operations at the Czech subsidiary and higher transportation costs, mainly at the Russian, Spanish and Hungarian subsidiaries.」

「In Europe, revenue was ¥14,430 million, down ¥4,733 million, or 24.7%, year on year, mainly because sales fell sharply at subsidiaries in Italy, Hungary and the United Kingdom as a result of customers' production adjustments and shutdowns caused by the spread of COVID-19. Operating loss was ¥2,088 million, compared with an operating loss of ¥1,645 million in the same period of the previous year, mainly due to costs related to starting operations at the Czech subsidiary and higher fixed-cost absorption resulting from lower sales at the subsidiaries.」

「In connection with the resolution to liquidate the consolidated U.K. subsidiary HI-LEX CABLE SYSTEM CO.,LTD., we recognized an impairment loss of ¥30 million on fixed assets.」

「In Europe, revenue was ¥14,983 million, down ¥2,621 million, or 14.9%, year on year, mainly due to sluggish sales by the Italian subsidiary. Operating loss was ¥1,123 million, compared with an operating loss of ¥665 million in the same period of the previous year, mainly due to sluggish sales by the Italian subsidiary and higher start-up costs at the new Czech company.」

「In Europe, revenue was ¥5,635 million, up ¥1,582 million, or 39.0%, year on year, mainly because sales by the Hungarian subsidiary remained solid and sales increased following the acquisition of the Italian subsidiary in the previous fiscal year. Operating loss was ¥291 million, compared with an operating loss of ¥162 million in the same period of the previous year, due mainly to sluggish production in Spain and higher start-up costs at the new Czech company.」

「From the first quarter of the current consolidated fiscal year, HI-LEX ITALY S.P.A. (formerly Lames S.P.A.) and HI-LEX AUTO PARTS SPAIN,S.L. (formerly CSA WINDOWS REGULATOR BARCELONA S.L.), formerly non-consolidated subsidiaries to which the equity method did not apply, have been included in the scope of consolidation because their materiality increased.」

「During the second quarter of the current consolidated fiscal year, we newly established HI-LEX Czech, s.r.o. in the Czech Republic and included it in the scope of consolidation.」

「HI-LEX ITALY S.P.A. (formerly Lames S.P.A.) and HI-LEX AUTO PARTS SPAIN,S.L. (formerly CSA WINDOWS REGULATOR BARCELONA S.L.), formerly non-consolidated subsidiaries to which the equity method did not apply, have been included in the scope of consolidation from the first quarter of the current consolidated fiscal year because their materiality increased.」

「May 2016: We underwrote a third-party allotment of shares by CSA WINDOWS REGULATOR BARCELONA S.L. in Barcelona, Spain (now HI-LEX AUTO PARTS SPAIN, S.L.), making it a subsidiary. October 2016: We acquired shares in Lames S.P.A. in Chiavari, Liguria, Italy (now HI-LEX ITALY S.P.A.), making it a subsidiary.」