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May 8, 2020
Consolidated Financial Results for the Fiscal Year Ended March 31, 2020 [Under Japanese GAAP]
Company name: ALPS ALPINE CO., LTD.
Listing: First Section of the Tokyo Stock Exchange
Code number: 6770
URL: https://www.alpsalpine.com/e/ir/index.html
Representative: Toshihiro Kuriyama
President & CEO
Inquiries to: Toshinori Kobayashi
Vice President
Officer in charge of Corporate Planning, Accounting & Finance (TEL.:+81-3-5499-8026)
Scheduled date to file Annual Securities Report: June 24, 2020
Scheduled date to commence dividend payments: June 25, 2020
Preparation of supplementary materials on annual earnings: Yes
Holding of annual earnings performance review: Yes (for analysts)
(Amounts are rounded down to the nearest million yen, unless otherwise noted)
1. Consolidated performance for the fiscal year ended March 31, 2020 (from April 1, 2019 to March 31, 2020)
(1) Consolidated operating results (Percentages indicate changes from the previous fiscal year)
Net sales Operating income Ordinary income
Net income attributable
to owners of parent
Millions of yen % Millions of yen % Millions of yen % Millions of yen % Fiscal year ended
March 31, 2020 810,570 (4.8) 26,795 (46.0) 18,646 (57.2) (4,009) ― March 31, 2019 851,332 (0.8) 49,641 (31.0) 43,605 (34.6) 22,114 (53.3)
(Note) Comprehensive income
For the Fiscal year ended March 31, 2020: ¥(9,686) million [―%]
For the Fiscal year ended March 31, 2019: ¥21,465 million (65.8)%
Basic earnings
per share
Diluted earnings
per share Return on equity
Ordinary income
to Total Assets
Operating income
margin
Yen Yen % % % Fiscal year ended
March 31, 2020 (19.53) ― (1.2) 2.9 3.3
March 31, 2019 110.19 110.14 6.6 6.5 5.8
(Reference) Share of loss of entities accounted for using equity method
For the Fiscal year ended March 31, 2020: ¥(3,166) million
For the Fiscal year ended March 31, 2019: ¥(1,584) million
(2) Consolidated financial position Total assets Net assets Equity ratio Net assets per share
Millions of yen Millions of yen % Yen As of
March 31, 2020 625,542 355,615 51.9 1,587.06
March 31, 2019 675,717 395,360 54.1 1,731.36
(Reference) Equity
As of March 31, 2020: ¥324,464 million
As of March 31, 2019: ¥365,346 million
(3) Consolidated cash flows Cash flows from
operating activities
Cash flows from
investing activities
Cash flows from
financing activities
Cash and cash equivalents
at the end of the year
Millions of yen Millions of yen Millions of yen Millions of yen Fiscal year ended
March 31, 2020 87,210 (42,419) (31,601) 128,217
March 31, 2019 72,671 (67,405) (6,910) 118,318
2. Cash dividends Annual dividends
Total amount
of dividend
Dividend
payout ratio
(Consolidated)
Ratio of
dividends to
net assets
(Consolidated)
June
30
September
30
December
31
March
31 Total
Yen Yen Yen Yen Yen Millions of yen % % Fiscal year ended March 31, 2019
― 25.00 ― 25.00 50.00 10,173 45.4 3.1
Fiscal year ended March 31, 2020
― 20.00 ― 10.00 30.00 6,137 ― 1.8
Fiscal year ending March 31, 2021 (Forecast)
― ― ― ― ― ―
(Note)The dividend forecast for the fiscal year ending March 2021 has not yet been determined at the present moment
3. Consolidated earnings forecasts for the fiscal year ending March 31, 2021 (from April 1, 2020 to March 31, 2021)
Regarding the Company's Consolidated earnings forecasts for the fiscal year ending March 31, 2021, it has not yet been
determined, because it would be difficult to measure the impact of the novel coronavirus (COVID-19). Hence, the Company
intends to promptly disclose the impact on the full-year earnings as soon as such disclosure becomes possible.
“(4) Forecast” under “1. Overview of Financial Results” on page 5 of the attached materials for more details regarding
the use of the forecasts.
* Notes
(1) Changes in significant subsidiaries during the year (changes in specific subsidiaries resulting in the change in scope of
consolidation): Applicable
Included: None Excluded: ALPS ELECTRIC (UK)LIMITED
(2) Changes in accounting policies, changes in accounting estimates and restatement:
a. Changes in accounting policies due to revisions to accounting standards: None
b. Changes in accounting policies due to other reasons: None
c. Changes in accounting estimates: None
d. Restatements: None
(3) Number of issued shares (common stock)
a. Total number of issued shares at the end of the period (including treasury stock)
Fiscal year ended March 31, 2020 219,281,450 shares
Fiscal year ended March 31, 2019 219,281,450 shares
b. Number of shares of treasury stock at the end of the period
Fiscal year ended March 31, 2020 14,837,907 shares
Fiscal year ended March 31, 2019 8,264,481 shares
c. Average number of shares during the period
Fiscal year ended March 31, 2020 205,306,192shares
Fiscal year ended March 31, 2019 200,694,007shares
(Reference) Standalone performance
Standalone performance for the fiscal year ended March 31, 2020 (from April 1, 2019 to March 31, 2020)
(1) Standalone operating results
(Percentages indicate year-on-year changes)
Net sales Operating income Ordinary income Net income
Millions of
yen
% Millions of
yen
% Millions of
yen
% Millions of
yen
%
Fiscal year ended March 31, 2020
357,168 (9.5) (7,524) ― (1,788) ― (14,760) ―
Fiscal year ended March 31, 2019
394,661 (14.6) 6,602 (77.8) 17,726 (46.3) 15,974 (51.7)
Basic earnings
per share
Diluted earnings
per share
Yen Yen Fiscal year ended March 31, 2020 (71.90) ― Fiscal year ended March 31, 2019 79.60 79.56
(2) Standalone financial position
Total assets Net assets Equity ratio Net assets per share
Millions of yen Millions of yen % Yen As of
March 31, 2020 328,745 173,046 52.6 845.32
March 31, 2019 373,633 211,438 56.5 1,000.60
(Reference) Equity
As of March 31, 2020: ¥172,821 million
As of March 31, 2019: ¥211,142 million
* Earnings reports are not subject to audit by external auditors.
* Explanation and other special notes concerning the appropriate use of earnings forecast
(Notes on forward-looking statements)
The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently
available to ALPS ALPINE CO., LTD. (the “Company”) and certain assumptions deemed to be reasonable, and are not
intended to guarantee the achievement of these forecasts. Actual results may differ materially from the forecasts due to various
factors. Please refer to “(4) Forecast” under “1. Overview of Financial Results” on page 5 of the attached materials for the
assumptions used in the forecasts and notes regarding the use of the forecasts.
(Access to supplementary material on annual earnings)
Supplementary material on annual earnings is available on the Company’s website on Friday, May 8, 2020.
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○ Supplementary Materials – Contents
1.Overview of Financial Results ............................................................................................................................................................ 2
(1) Overview of financial results for the fiscal year ended March 31, 2020 ................................................................................... 2
(2) Overview of financial position for the fiscal year ended March 31, 2020 ................................................................................. 4
(3) Overview of cash flows for the fiscal Year ended March 31, 2020 ........................................................................................... 4
(4) Forecast ..................................................................................................................................................................................... 5
(5) Basic policy for distribution of earnings and dividends for the fiscal year ended March 31, 2020 and for the fiscal year
ending March 31, 2021 ................................................................................................................................................................... 5
(6) Business Risk ............................................................................................................................................................................ 6
2.Information Regarding the Company.................................................................................................................................................. 6
3.Management Policy, Business Environment and Challenges Facing .................................................................................................. 6
(1) The Company’s basic management policy ................................................................................................................................ 6
(2) The Company’s mid- and long-term business strategy and target management indicators ....................................................... 7
(3) The Company’s business environment and challenges facing ................................................................................................... 7
4.Basic Policy for Accounting Policy Selection .................................................................................................................................... 8
5. Consolidated Financial Statements and Significant Notes Thereto ...................................................................................................... 9
(1) Consolidated balance sheet ....................................................................................................................................................... 9
(2) Consolidated statement of income and comprehensive income .............................................................................................. 11
(3) Consolidated statement of changes in net assets ..................................................................................................................... 13
(4) Consolidated statement of cash flows ..................................................................................................................................... 15
(5) Notes to consolidated financial statements .............................................................................................................................. 16
(Notes on going concern assumptions) ................................................................................................................................... 16
(Changes in the fiscal year of consolidated subsidiaries) ........................................................................................................ 16
(Important matters underlying the preparation of consolidated financial statements) ............................................................. 16
(Omission of disclosures)........................................................................................................................................................ 17
(Segment information) ............................................................................................................................................................ 17
(Per share information) ........................................................................................................................................................... 20
(Subsequent events) ................................................................................................................................................................ 21
6. Non-consolidated Financial Statements ............................................................................................................................................. 22
(1) Balance sheet ........................................................................................................................................................................... 22
(2) Statement of income ................................................................................................................................................................ 24
(3) Statement of changes in net assets ........................................................................................................................................... 25
7. Other .................................................................................................................................................................................................. 27
(1) Sales results of the Electronic Components Segment .............................................................................................................. 27
(2) Change of Directors and Officers (expected effective date is June 24, 2020) ......................................................................... 27
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1.Overview of Financial Results
(1) Overview of financial results for the fiscal year ended March 31, 2020
Regarding the global economy during the fiscal year ended March 31, 2020, the outlook for the global economy
remains bleak due to the outbreak of the novel coronavirus (COVID-19). Regarding the nine months ended
December31, 2019, the US economy remained strong supported by steady consumer spending due to the Federal
Reserve Board's easy monetary policy and labor market improvement while in the manufacturing industry showed
signs of a slowdown. On the other hand, in Europe, the recovery of exports was delayed due to the impact of the
global economic slowdown, and a continued turmoil over the U.K.’s withdrawal from the EU also had a negative
impact on the economy. In China, although the first phase of trade talks was agreed upon with the U.S., the
economy has been sluggish due to a decrease in exports to the U.S. and a decrease in consumer spending in the
prolonged trade friction. In Japanese economy, while in the manufacturing industry showed signs of a slowdown,
strong labor market trend continued, and the overall economy remained firm accordingly. During the fourth quarter,
the impact of the coronavirus, which spreads worldwide, began in China in February 2020, and subsequently spread
to Europe, the United States, and Asia simultaneously. From March onwards, due to the infection control measures
of the governments of each country, it was announced that the manufacturing industry in each country suspended
their plant operation, which had a great impact on the global economy during the current consolidated fiscal year.
Operating results for the fiscal year ended March 31, 2020 are summarized below. Net sales shown below
represent net sales to external parties, after elimination of inter-segment sales (e.g., sales made by the Electronic
Components Segment to the Automotive Infotainment Segment (supply of products) or sales made by the Logistics
Segment to the Electronic Components Segment and the Automotive Infotainment Segment (provision of logistics
services)).
(Results of each operating segment)
(i) Electronic Components Segment
In the electronics industry, while new product development for CASE (Connected, Autonomous, Shared &
Services, Electric) has continued to accelerate in the automotive market, the current market conditions are
sluggish due to a year on year decline in the volume of global new car sales. The smartphone market as a whole
has experienced negative growth due to the impact of the coronavirus was the significant impact, despite strong
sales of some new products. Each market of EHII (Energy, Healthcare, industry, IoT), specific initiatives are
accelerating, including proposals for new businesses that combine IoT (Internet of Things) and AI.
Under these circumstances surrounding the Electronic Components Segment, in the automotive market, sales
of modules and high-frequency products for communication products decreased overall due to the softening of
the automotive market. In the consumer market, although efforts were made to cultivate new customers and
expand sales of various products for smartphones, the trend was weak. In addition to these factors, sales and
operating income decreased compared to the previous fiscal year due to the spread of the coronavirus.
[Automotive market]
In the automotive market within the Electronic Components Segment, for the era of autonomous driving, we
continued to develop the variety of next generation products including high-grade input devices (Premium-HMI) in
vehicle interiors. As part of the initiatives for CASE development, we further promoted proposal activities for the
next generation products, such as touch input modules. However, the impact on production and sales has widened
due to supply chain disruption and our response to measures to control the spread of the coronavirus at our plants in
China since February. Subsequently, each of our plants in China progressively restarted operations, however the
pandemic spread simultaneously across Europe, America and Asia. Since March, due to governments’ measures to
control the spread of infection, our customers in Europe, America, Asia and Japan have announced that their plants
would be closed from the start of March. Consequently, the global automotive market became sluggish.
Net Sales in this market for the fiscal year ended March 31, 2020 amounted to ¥242.0 billion, a decrease of
12.9% compared to the previous fiscal year.
[Consumer market]
In the consumer market, even after the Chinese New Year, the suspension of operations at our plant in China,
which produce camera actuators for smartphones, had a continuing huge effect on the business activities.
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Although we continued to acquire new customers and to expand sales of camera actuators and touch panels for
smartphones, overall sales were weak due to the impact of the coronavirus. In EHII, specific activities were
carried out, such as a Logistics Asset Tracker using IOT, which was adopted by AGC Inc. using it for product
transport pallets for the first time in Japan's domestic market.
Net sales in this market for the fiscal year ended March 31, 2020 amounted to ¥182.6 billion, a decrease of
4.2% compared to the previous fiscal year.
As a result, net sales in the Electronic Components Segment for the fiscal year ended March 31, 2020 amounted
to ¥424.7 billion, a decrease of 9.4%, and operating income amounted to ¥16.1 billion, a decrease of 45.5 %
compared to the previous fiscal year.
(ii) Automotive Infotainment Segment
In the automotive industry, sales of new cars declined in China, the world's largest market, due to the economic
slowdown, and sales volume also decreased in the U.S. and Europe compared with the previous fiscal year. In
addition, the business environment surrounding our automotive industry has greatly changed, leading to an
intensified competition among companies that cross the frameworks of the business area or industry, including IT
and communications in order to utilize the mobile communication standard 5G for next generation for connected
cars and autonomous driving.
Under these circumstances, in the Automotive Infotainment Segment, we are aiming the early realization of
synergies through the business integration by focusing on the development of a new products that link display
products with the Electronic Components Segment’s sensors and the commercialization of a drone system that uses
a GPS (Global Positioning System) in navigations and technologies that combine image processing technology and
sensors. We commenced the development of a vehicle warning system that alerts pedestrians to the approach of a
vehicle by applying our technology cultivated through the development of audio speakers.
In order to develop digital keys for car sharing using block chain technology and to manage vehicle information
for connected cars, we acquired a certain number of shares of FreeBit, Co., Ltd., an IT company and strengthened
MaaS (Mobility as a Service) business through business partnership.
As the same as the automotive market in the electronic components segment, the result for the fiscal year ended
March 31, 2020, were affected by the rapid slowdown in sales genuine products after March, such as movement
restriction and suspension of operations at customer plant due to the spread of the coronavirus in Europe and the
U.S.. Sales increased due to favorable performance of some products compared with the previous fiscal year, but
operating income declined due to R&D expenses and other factors resulting from getting the orders in the future.
As a result, net sales in the Automotive Infotainment Segment for the fiscal year ended March 31, 2020 amounted
to ¥306.2 billion, an increase of 0.9%, and operating income amounted to ¥5.6 billion, a decrease of 59.4% compared
to the previous fiscal year.
(iii) Logistics Segment
In the electronic component industry, which is a major source of customers of the Logistics Segment, the
movement of freight was slow due to decreasing demand for various electronic equipment, automobiles and
industrial equipment. In addition, the spread of the coronavirus led to the suspension of operations at our customers'
plants and the strengthening of various regulations in each country. As a result, the volume of cargo handled were
affected to some extent from February 2020 in China and from March mainly in North America and ASEAN. In
contrast, we expect that increases in demand for semiconductors and electronic components are anticipated as 5G
(the mobile communication standard for next generation), IoT, and computerization of automobiles develop.
In the Logistics Segment (Alps Logistics Co., Ltd., listed on the Second Section of the Tokyo Stock Exchange),
with such a demand trend, we made an effort to increase the volume of cargo handled by establishing hubs and
enhancing network in particular regions, where an increase in demand for electronic components was anticipated in
the future. Regarding ASEAN countries and South Asia region, the construction of a large warehouse in Thailand
was completed and operations were launched in July 2019. In Europe, we established an office in Hungary as our
first step to expand our business in Eastern Europe. Moreover, we made our efforts to enhance productivity through
stable operations and efficiency improvement in expanded bases. In addition, as one of the measures to strengthen
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automotive related logistics, we established a joint venture with Logicom Co., Ltd. as the first step of the measures
for global business development, we established a subsidiary in India, in order to expand our automotive related
businesses.
During the fiscal year ended March 31, 2020, despite efforts to acquire new customers in Japan and overseas, net
sales decreased due to a decrease in overall movement of electronic freight, resulting from US-China trade friction
and the impact of the coronavirus expanded.
As a result, net sales in the Logistics Segment for the fiscal year ended March 31, 2020 amounted to ¥66.8 billion,
a decrease of 0.0%, and operating income amounted to ¥4.1 billion, a decrease of 12.8% compared to the previous
fiscal year.
On the consolidated basis, the Group, consisting of three operating segments noted above and other, recorded net
sales of ¥810.5 billion, operating income of ¥26.7 billion, ordinary income of ¥18.6 billion, which were decreases
of 4.8%, 46.0%, 57.2% respectively, compared to the previous fiscal year. Further, net loss attributable to owners of
parent of ¥4.0 billion for the fiscal year ended March 31, 2020, while net income attributable to owners of parent
was ¥22.1 billion for the previous fiscal year.
(2) Overview of financial position for the fiscal year ended March 31, 2020
Assets, Liabilities and Net Assets
Total assets as of March 31, 2020 were ¥625.5 billion, a decrease of ¥50.1 billion from the end of the previous
fiscal year. Equity decreased ¥40.8 billion due to factors such as decreases in retained earnings and increase in
treasury stock to ¥324.4 billion, and equity ratio was 51.9%.
Current assets as of March 31, 2020 were ¥369.1 billion, a decrease of ¥33.7 billion from the end of the previous
fiscal year due to factors such as a decrease in trade notes and accounts receivable, as well as an increase in cash
and deposits.
Non-current assets as of March 31, 2020 were ¥256.3 billion, a decrease of ¥16.4 billion from the end of the
previous fiscal year, due to factors such as decreases in machinery, equipment and vehicles, deferred tax assets, as
well as increases in intangible assets.
Current liabilities as of March 31, 2020 were ¥198.0 billion, an increase of ¥10.0 billion from the end of the
previous fiscal year, due to factors such as increases in short-term borrowings, as well as decreases in trade notes
and accounts payable.
Non-current liabilities as of March 31, 2020 were ¥71.8 billion, a decrease of ¥20.4 billion from the end of the
previous fiscal year, due to factors such as a decrease in long-term borrowings, as well as an increase in liability for
retirement benefits.
(3) Overview of cash flows for the fiscal Year ended March 31, 2020
The balance of cash and cash equivalents (the “cash”) as of March 31, 2020 was ¥128.2 billion, an increase of ¥9.8
billion from the end of the previous fiscal year.
(Cash flows from operating activities)
The increase in cash from operating activities for the fiscal year ended March 31, 2020 was ¥87.2 billion,
compared to an increase of ¥72.6 billion for the previous fiscal year.
The increase was mainly related to an increase in cash due to ¥46.0 billion of depreciation and amortization, a
decrease of ¥31.1 billion in trade and other receivables, ¥15.5 billion of income before income taxes, as well as a
decrease in cash due to ¥9.6 billion of income taxes paid, ¥4.0 billion of increase in inventories.
(Cash flows from investing activities)
The decrease in cash from investing activities for the fiscal year ended March 31, 2020 was ¥42.4 billion,
compared to a decrease of ¥67.4 billion for previous fiscal year. The decrease was mainly related to a decrease in
cash due to ¥40.6 billion used for acquisition of property, plant and equipment and intangible assets, ¥3.5 billion of
purchase of ownership interests of subsidiaries in change in scope of consolidation, ¥3.0 billion of increase in time
deposits as well as increase in cash due to ¥5.2 billion of proceeds from withdrawal of time deposits.
(Cash flows from financing activities)
The decrease in cash from financing activities for the fiscal year ended March 31, 2020 was ¥31.6 billion,
compared to a decrease of ¥6.9 billion for the previous fiscal year. The decrease was mainly related to a decrease in
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cash due to ¥12.3 billion used for purchase of treasury stock, ¥9.3 billion used for cash dividends paid, ¥8.8 billion
of repayment of long-term loans payable.
Movement of the Company’s management indicators related to financial position are as follows
Fiscal year
ended
March 31, 2016
Fiscal year
ended
March 31, 2017
Fiscal year
ended
March 31, 2018
Fiscal year
ended
March 31, 2019
Fiscal year
ended
March 31, 2020
Equity ratio (%) 40.6 42.2 45.0 54.1 51.9
Equity ratio based on market value (%) 68.3 102.5 76.3 72.1 34.3
Debt redemption period (years) 1.1 1.6 1.1 1.5 1.2
Interest coverage ratio 50.4 81.6 91.2 58.7 66.4
Equity ratio: Equity / Total assets
Equity ratio based on market
value: Market capitalization / Total assets
Debt redemption period: Interest-bearing liabilities / Operating cash
flows
Interest coverage ratio: Operating cash flows / Interest expenses paid
* Each indicator is calculated using financial figures on a consolidated basis.
* Market capitalization is calculated by multiplying closing price of the stock at the end of the fiscal year by number
of shares issued and outstanding at the end of the year.
* Operating cash flows are derived from cash flows from operating activities on the consolidated statement of cash
flows. Interest-bearing liabilities are aggregate of corporate bonds, convertible bonds, bonds with subscription rights
to shares, and borrowings on the consolidated balance sheet. Interest expenses paid is derived from interest paid on the
consolidated statement of cash flows.
(4) Forecast
With continuing trade friction between the U.S. and China, and the U.K.'s withdrawal from the EU, and the
spread of the coronavirus, the global economy is becoming increasingly uncertain. In the electronics industry, the
business environment surrounding our automotive industry has greatly changed along with the development of
CASE, with the advanced functionality trend of smartphone-related products, with the development variety of new
services within IOT in the EHII markets. However, the market condition remains severe in our industry due to the
impact of the coronavirus.
In this economic environment, the 1st year of the 1st Medium-Term Management Plan has passed, in order to
become “Innovative T-Shaped Company (ITC101)”, we are accelerating our projects to develop synergy from the
business integration. The spread of the coronavirus is affecting the Company’s consolidated results through a
decrease in the utilization rate of oversea plants in the Group, and a fall in sales in each segment. Therefore, in
order to mitigate this effect, we will continue to take necessary measures in response to rapidly changing situations.
Further, we aim to expand our logistics business through expansion of global network and further promote group-
wide business operations to enhance our corporate value.
Regarding the Company's Consolidated earnings forecasts for the fiscal year ending March 31, 2021, it has not yet
been determined, because it would be difficult to measure the impact of the coronavirus at this stage. Hence, the
Company intends to promptly disclose the impact on the full-year earnings as soon as such disclosure becomes
possible.
(5) Basic policy for distribution of earnings and dividends for the fiscal year ended March 31, 2020 and for the fiscal
year ending March 31, 2021
Our basic policy is to actively adopt shareholder return measures such as share buybacks according to surplus
capital and financial capacity, in addition to making profit distribution decision based on the consolidated profit of
Electronic Components Segment and Automotive Infotainment Segment, considering the balance of (i) return profits
to shareholders, (ii) allocate funds to R&D and capital investment for future business development and enhanced
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competitiveness, and (iii) retain profit internally.
We determine profit allocation in consideration of a balance of all three elements with respect to internal reserves
as described above. In accordance with this policy, we will make a proposal at the 87th Ordinary General Meeting of
Shareholders to pay a year-end dividend of ¥10 per share for the fiscal year ended March 31, 2020, taking into overall
consideration of our financial performance, financial position, and shareholder expectations for dividends.
Further, the dividend distributions in the fiscal year ending March 31, 2021 has not been determined at the present
moment.
(6) Business Risk
In addition to the contents described in the securities report submitted on June 21, 2019, the spread of the coronavirus
infection caused a decrease in sales in each business and utilization rate of oversea plants. It may affect our operating
results and financial condition.
(Note)
Forward looking statements, forecasts, plans, policies, strategies in these materials that are not finalized facts, are
derived from the Company’s forecast based on the information that was available as of the report release date and
certain assumptions deemed to be reasonable. Actual results may differ from the forecasts due to various risk factors
and uncertainties.
2.Information Regarding the Company
(Changes in important subsidiaries during the accounting period)
From the 4th quarter consolidated accounting period, ALPS ELECTRIC (UK) LIMITED, which was our
consolidated subsidiary and also a specified subsidiary, was excluded from the scope of consolidation as it was
liquidated.
In addition, during the first quarter consolidated accounting period, due to the additional acquisition of shares,
FAITAL S.p.A., which was an affiliated company, and two of its subsidiaries are newly included in the scope of
consolidation although they were not specified subsidiaries.
The items other than the above are omited because there is no material change from disclosures in “Overview of
business” and “Affiliated companies” in the Annual Securities Report filed on June 21, 2019.
3.Management Policy, Business Environment and Challenges Facing
(1) The Company’s basic management policy
The Group has three pillars: Electronic Components Segment, Automotive Infotainment Segment and Logistics
Segment, each of which develops synergy from close collaboration with each other and operates its business globally.
Our goal is to become an “Innovative T-shaped Company (ITC101)”. By integrating “vertical I-Shaped” strength
being the developing of core devices to create competitive products and “horizontal I-Shaped” strength being the
developing of systems utilizing a wide range of devices and technologies, and by providing new values, the Company
is determined to become an “Innovative T-Shaped Company” with the aim of ¥1 trillion net sales and 10% operating
income margin by the fiscal year ending March 31, 2025. Toward this goal, the Alps Company will promote the
“evolution from component supplier to functional device partner”, and the Alpine Company will “evolve into
mobility life creator with in-house core devices”.
Guided by a philosophy of “creating new value that satisfies stakeholders and is friendly to the Earth”, the
Electronic Components Segment aims to realize comfortable communication between people and media. The
Company’s approach to “monozukuri” is summed up in the phrase, “perfecting the art of electronics,” meaning we
create products that are “Right (optimal)”, “Unique (distinctive)”, and “Green (environment-friendly)”. In other
words, it is a product that has not only sophisticated appearances but also high-quality functions with environmental
considerations such as energy and resource savings. To realize this goal, we are constantly pursuing advanced
monozukuri based on various unique technologies such as microfabrication, mold processing, software/IC design,
and material processing. In addition to component products such as switches and sensors, and module products, we
are also working on new product development and business domains such as green devices.
In the Automotive Infotainment Segment, by integrating the Electronic Components Segment’s in-car
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device/module products and the Automotive Infotainment Segment’s products for automakers, and with the synergy
effect of the technologies cultivated by both segments and their respective fields of expertise, going forward, we will
work on creative and innovative product development to provide services that offer safe, comfortable and impressive
driver and passenger experiences and to realize high-quality transportation spaces.
In the Logistics Segment, Alps Logistics Co., Ltd. handles electronic components as its main cargo, under a
corporate philosophy of “pursuing the best form of logistics that supports monozukuri and contributing to enriching
the society”, and its business domain is defined as an “integrated logistics service specializing in electronic
components”.
Each group company will collaborate with each other under the corporate philosophy, promotes medium- and
short-term management plans, and aims to expand business and maximize corporate value.
(2) The Company’s mid- and long-term business strategy and target management indicators
The 1st Mid-Term Business Plan for the three-year period from April 2019 to the end of March 2022 has started.
Our goal is to become an “Innovative T-shaped Company (ITC101)”. We aim to achieve net sales of ¥1 trillion and
operating income margin of 10% by the fiscal year ending March 31, 2025, by evolving from component supplier to
functional device partner and by evolving into mobility life creator with in-house core devices.
In the Electronic Components Segment, we aim to integrate our three core technologies including HMI, sensors
and connectivity, and evolve them into functional devices that incorporate software.
In the Automotive Infotainment Segment, amid changes in the usage style of automobiles, we aim to develop
proposal-based system products that consider the entire car lifestyle, and expand further to develop high-value-added
products that combine these products with core devices cultivated through the Electronic Components Segment.
In the Logistics Segment, the 4th Mid-Term Business Plan for the three-year period from the fiscal year ended
March 31, 2020 has started. Our Mid-Term Business Plan is to “provide the best form of logistics that keeps evolving
to more customers.” We will take initiatives to “achieve consolidated net sales of ¥120 billion” and to “improve
corporate quality”.
(3) The Company’s business environment and challenges facing
While environment surrounding the Group is extremely difficult to forecast amid growing uncertainty, demand for
electronics products and vehicles is expected to grow, driven by the increased demand for high-performance and
multi-functional products in developed countries, and the increasing demand in emerging countries is expected to
lead the growth in medium- and long-term.
In the Electronic Components Segment, the automotive market, in which electronics is becoming increasingly
important, and the smartphone market, which is experiencing high demand for high-performance components despite
slowing growth, and the VR market, which is emerging, are expected to continue to expand. We will continue to
create highly competitive products from the three technological domains of HMI, Sensors and Connectivity to meet
those needs. In order to accelerate development and improve productivity and quality, we will further strengthen our
efforts on our technology, sales, and manufacturing divisions to create Number 1 products.
In addition, as our customers are expanding globally and demand for specific products fluctuates dramatically
over a short period of time, we need to implement and establish a more robust and flexible production system. In
addition to promoting the establishment of production bases in Japan and overseas, we will also increase profitability
by improving productivity, including that of our back-office divisions. Furthermore, in EHII market which has a wide
range of business models, we will work to establish a business foundation through the development of proprietary
products and collaborations and alliances with other companies.
In the Automotive Infotainment Segment, today’s automotive industry has entered a phase of tremendous
transformation that is said to occur only once every 100 years. In particular, the four domains which are referred to
as CASE are seeing, major changes that are unparalleled by other industries, such as the constant connection to the
internet, autonomous driving, automobile sharing services, and a shift toward vehicle electrification such as with
hybrid cars and electric vehicles. In addition, the trend of mergers and acquisitions that transcend the framework of
the automobile industry is accelerating even faster than in the past, as exemplified by the expansion of IT companies
into the automotive industry. Focusing management resources on CASE domains will continue to be a trend in the
automobile industry as a whole, and suppliers such as HMI are expected not only to develop module products, but
also to propose total system solutions for the entire automotive industry.
- 8 -
In light of these rapidly changing market conditions for automotive infotainment equipment, to develop new
products that combine the strengths of the Electronic Components Segment and the business, and to shorten the lead
time for commercialization are urgent issues. By creating synergies through the business integration, we will respond
swiftly to these issues and meet the expectations of customers.
In the Logistics Segment, the electronic components industry, which is our main customer, is expected to continue
growing due to the advancement of computerization of various equipment and automobiles as well as the expansion
of demand in emerging countries. On the other hand, customers’ need for logistics reforms is becoming sophisticated
and diverse due to progress in optimizing production and rationalizing production and sales in response to changes
in products and markets. Under these circumstances, by pursuing “the best form of logistics” for each customer and
providing it to more customers, we aim to grow further globally.
We will also contribute to the revenue of other businesses by strengthening sales activities outside the Group.
4.Basic Policy for Accounting Policy Selection
Considering the comparability of consolidated financial statements between periods and companies, for the time
being, the Company and the Group intends to prepare consolidated financial statements based on Japanese generally
accepted accounting principles.
With regard to the application of IFRS, our policy is to take appropriate actions considering domestic and foreign
trends while improving the system environment.
- 9 -
5. Consolidated Financial Statements and Significant Notes Thereto
(1) Consolidated balance sheet
(Millions of yen)
As of March 31, 2019 As of March 31, 2020
Assets
Current assets
Cash and deposits 122,079 129,598
Trade notes and accounts receivable 156,875 119,604
Merchandise and finished goods 58,314 63,061
Work in process 10,574 11,344
Raw material and supplies 26,946 26,067
Others 28,434 19,763
Allowance for doubtful accounts (320) (252)
Total current assets 402,905 369,187
Non-current assets
Property, plant and equipment
Buildings and structures 146,174 152,279
Accumulated depreciation and impairment loss (96,552) (100,575)
Buildings and structures, net 49,621 51,704
Machinery, equipment and vehicles 248,709 249,808
Accumulated depreciation and impairment loss (177,574) (191,444)
Machinery, equipment and vehicles, net 71,134 58,364
Tools, furniture and fixtures and molds 140,058 142,118
Accumulated depreciation and impairment loss (118,017) (120,095)
Tools, furniture and fixtures and molds, net 22,040 22,022
Land 30,899 30,404
Construction in progress 13,949 15,368
Total property, plant and equipment, net 187,646 177,865
Intangible assets, net 23,248 28,259
Investments and other assets
Investment securities 27,220 30,985
Deferred tax assets 16,600 6,960
Retirement benefit assets 61 12
Others 18,877 12,798
Allowance for doubtful accounts (842) (527)
Total investments and other assets 61,917 50,230
Total non-current assets 272,811 256,354
Total assets 675,717 625,542
- 10 -
(Millions of yen)
As of March 31, 2019 As of March 31, 2020
Liabilities
Current liabilities
Trade notes and accounts payable 69,596 61,781
Short-term borrowings 38,245 56,198
Accrued expenses 17,863 16,190
Accrued income taxes 4,689 4,096
Provision for bonuses 10,574 10,120
Provision for directors’ bonuses 125 79
Provision for product warranties 8,791 9,798
Other provisions 370 460
Others 37,773 39,314
Total current liabilities 188,029 198,038
Non-current liabilities
Long-term borrowings 70,570 43,672
Deferred tax liabilities 1,038 2,333
Defined benefit liabilities 14,739 18,828
Provision for directors’ retirement benefits 206 168
Provision for environmental measures 590 590
Others 5,181 6,293
Total non-current liabilities 92,326 71,887
Total liabilities 280,356 269,926
Net assets
Shareholders’ equity
Common stock 38,730 38,730
Capital surplus 126,561 126,544
Retained earnings 227,078 206,491
Treasury stock (18,283) (32,233)
Total shareholders’ equity 374,086 339,533
Accumulated other comprehensive income (loss)
Unrealized gains on securities 3,194 13,435
Deferred gains on hedges 12 -
Revaluation reserve for land (496) (496)
Foreign currency translation adjustments (7,628) (18,214)
Remeasurements of defined benefit plans (3,822) (9,792)
Total accumulated other comprehensive loss (8,740) (15,068)
Subscription rights to shares 361 278
Non-controlling interests 29,652 30,872
Total net assets 395,360 355,615
Total liabilities and net assets 675,717 625,542
- 11 -
(2) Consolidated statement of income and comprehensive income
(Millions of yen)
Fiscal year ended
March 31, 2019
Fiscal year ended
March 31, 2020
Net sales 851,332 810,570
Cost of sales 689,337 670,700
Gross profit 161,995 139,870
Selling, general and administrative expenses 112,353 113,074
Operating income 49,641 26,795
Non-operating income
Interest income 705 798
Dividend income 481 509
Subsidy income 471 1,380
Miscellaneous income 1,060 872
Total non-operating income 2,718 3,561
Non-operating expenses
Interest expense 1,297 1,298
Foreign exchange losses 2,082 3,655
Share of loss of entities accounted for using
equity method 1,584 3,166
Commission fee 2,586 1,625
Miscellaneous expenses 1,202 1,964
Total non-operating expense 8,754 11,709
Ordinary income 43,605 18,646
Extraordinary income
Gain on sale of non-current assets 544 1,946
Insurance income for loss on disaster - 2,772
Others 648 803
Total extraordinary income 1,193 5,522
Extraordinary loss
Impairment loss 1,839 2,688
Loss on valuation of investment securities 251 1,149
Loss on valuation of investments in capital of
subsidiaries and affiliates - 933
Business structure improvement expenses 860 -
Loss on realization of foreign currency
translation adjustments - 1,282
Loss on disaster - 1,989
Others 658 556
Total extraordinary loss 3,609 8,601
Income before income taxes 41,189 15,568
Current income taxes 10,890 10,375
Deferred income taxes 1,124 7,591
Total income taxes 12,014 17,966
Net income (loss) 29,174 (2,398)
Net income attributable to:
Owners of parent 22,114 (4,009)
Non-controlling interests 7,059 1,610
Other comprehensive income (loss)
Unrealized gains (losses) on securities (2,689) 9,367
Deferred gains on hedges 1 0
Foreign currency translation adjustments (3,162) (9,665)
Remeasurements of defined benefit plans (628) (5,982)
Share of other comprehensive loss of investments
accounted for using the equity method (1,230) (1,008)
Total other comprehensive loss (7,708) (7,288)
Comprehensive income 21,465 (9,686)
- 12 -
Comprehensive income attributable to:
Owners of parent 18,123 (10,671)
Non-controlling interests 3,341 985
- 13 -
(3) Consolidated statement of changes in net assets
For the fiscal year ended March 31, 2019 (from April 1, 2018 to March 31, 2019) (Millions of yen)
Shareholders’ equity
Common stock Capital surplus Retained earnings Treasury stock Total shareholders’
equity Balance at the beginning of the
year 38,730 56,065 213,790 (3,497) 305,088
Changes during the year
Dividends (8,815) (8,815)
Net income (loss) attributable
to owners of parent 22,114 22,114
Purchase of treasury stock (17,704) (17,704)
Disposal of treasury stock 17 33 51
Reversal of revaluation reserve for land (11) (11)
Share exchange 70,515 2,884 73,400
Changes in the fiscal year of
consolidated subsidiaries -
Change in scope of equity
method -
Change in shares of parent
arising from transactions with
non-controlling shareholders (36) (36)
Changes in items other than
shareholders' equity, net
Total changes during the year - (70,496) 13,288 (14,786) 68,997
Balance at the end of the year 38,730 126,561 227,078 (18,283) 374,086
Accumulated other comprehensive income
Subscription
rights to
shares
Non-
controlling
interests
Total net
assets Unrealized
gains on
securities
Deferred
losses on
hedges
Revaluation
reserve for
land
Foreign
currency
translation
adjustments
Remeasurements
of defined
benefit plans
Total
accumulated
other
comprehensive
income (loss)
Balance at the beginning of the
year 4,734 (0) (505) (5,339) (2,800) (3,912) 333 114,362 415,872
Changes during the year
Dividends (8,815)
Net income (loss) attributable
to owners of parent 22,114
Purchase of treasury stock (17,704)
Disposal of treasury stock 51
Reversal of revaluation reserve
for land (11)
Share exchange 73,400
Changes in the fiscal year of
consolidated subsidiaries -
Change in scope of equity
method -
Change in shares of parent
arising from transactions with
non-controlling shareholders (36)
Changes in items other than
shareholders' equity, net (1,540) 13 9 (2,289) (1,021) (4,828) 28 (84,709) (89,509)
Total changes during the year (1,540) 13 9 (2,289) (1,021) (4,828) 28 (84,709) (20,511)
Balance at the end of the year 3,194 12 (496) (7,628) (3,822) (8,740) 361 29,652 395,360
- 14 -
For the fiscal year ended March 31, 2020 (from April 1, 2019 to March 31, 2020) (Millions of yen)
Shareholders’ equity
Common stock Capital surplus Retained earnings Treasury stock Total shareholders’
equity Balance at the beginning of the
year 38,730 126,561 227,078 (18,283) 374,086
Changes during the year
Dividends (9,368) (9,368)
Net income (loss) attributable
to owners of parent (4,009) (4,009)
Purchase of treasury stock (14,106) (14,106)
Disposal of treasury shares (11) 157 145
Reversal of revaluation reserve for land -
Share exchange -
Changes in the fiscal year of
consolidated subsidiaries 13 13
Change in scope of equity
method (7,222) (7,222)
Change in shares of parent
arising from transactions with
non-controlling shareholders
(6) (6)
Changes in items other than
shareholders' equity, net
Total changes during the year - (17) (20,586) (13,949) (34,553)
Balance at the end of the year 38,730 126,544 206,491 (32,233) 339,533
Accumulated other comprehensive income
Subscription
rights to
shares
Non-
controlling
interests
Total net
assets
Unrealized
gains
(losses) on
securities
Deferred
gains
(losses) on
hedges
Revaluation
reserve for
land
Foreign
currency
translation
adjustments
Remeasurements
of defined
benefit plans
Total
accumulated
other
comprehensive
loss
Balance at the beginning of the
year 3,194 12 (496) (7,628) (3,822) (8,740) 361 29,652 395,360
Changes during the year
Dividends (9,368)
Net income (loss) attributable
to owners of parent (4,009)
Purchase of treasury stock (14,106)
Disposal of treasury shares 145
Reversal of revaluation reserve
for land -
Share exchange -
Changes in the fiscal year of
consolidated subsidiaries 13
Change in scope of equity
method (7,222)
Change in shares of parent
arising from transactions with non-controlling shareholders
(6)
Changes in items other than
shareholders' equity, net 10,240 (12) (10,585) (5,970) (6,328) (82) 1,219 (5,191)
Total changes during the year 10,240 (12) - (10,585) (5,970) (6,328) (82) 1,219 (39,745)
Balance at the end of the year 13,435 - (496) (18,214) (9,792) (15,068) 278 30,872 355,615
- 15 -
(4) Consolidated statement of cash flows
(Millions of yen)
Fiscal year ended
March 31, 2019
Fiscal year ended
March 31, 2020
Cash flows from operating activities
Income before income taxes 41,189 15,568
Depreciation and amortization 44,188 46,057
Impairment loss 1,839 2,688
Increase in provision for product warranties 1,901 1,256
Interest and dividend income (1,186) (1,307)
Interest expense 1,297 1,298
Share of loss of entities accounted for using
equity method 1,584 3,166
Gain on sales of non-current assets (544) (1,946)
Insurance income for loss on disaster - (2,772)
Loss on valuation of investment securities 251 1,149
Loss on realization of foreign currency
translation adjustments - 1,282
Loss on disaster - 1,989
Decrease in trade and other receivables 1,457 31,102
Increase in inventories (912) (4,087)
Increase (decrease) in trade and other payables 4,739 (2,881)
Increase (decrease) in accrued expenses 123 (1,249)
Others (7,596) 2,903
Subtotal 88,332 94,216
Interest and dividend received 1,386 1,190
Interest paid (1,237) (1,313)
Insurance proceeds on disaster - 2,772
Income taxes paid (15,810) (9,655)
Net cash provided by operating activities 72,671 87,210
Cash flows from investing activities
Increase in time deposits (4,700) (3,031)
Proceeds from withdrawal of time deposits 1,690 5,202
Acquisition of property, plant and equipment (52,348) (32,653)
Proceeds from sales of property, plant and
equipment 1,153 2,565
Acquisition of intangible assets (8,546) (7,997)
Purchase of investment securities (61) (2,786)
Purchase of shares of affiliated companies (1,296) -
Purchase of ownership interests of subsidiaries in
change in scope of consolidation (439) (3,561)
Others (2,855) (156)
Net cash used in investing activities (67,405) (42,419)
Cash flows from financing activities
Net increase (decrease) in short-term loans
payable (4,200) 231
Proceeds from long-term loans payable 46,052 1,000
Repayment of long-term loans payable (3,155) (8,865)
Cash dividends paid (8,815) (9,368)
Cash dividends paid to non-controlling interests (6,035) (793)
Purchase of treasury stock (17,521) (12,362)
Contribution to money held in trust for purchase
of treasury stock (1,989) -
Repayments of lease obligations (646) (1,267)
Others (10,598) (175)
Net cash used in financing activities (6,910) (31,601)
Effect of exchange rate changes on cash and cash (815) (4,070)
- 16 -
equivalents
Net increase (decrease) in cash and cash equivalents (2,460) 9,119
Cash and cash equivalents at the beginning of the
year 120,778 118,318
Net increase in cash and equivalent resulting from
changes in closing date of consolidated subsidiaries - 778
Cash and cash equivalents at the ending of the year 118,318 128,217
(5) Notes to consolidated financial statements
(Notes on going concern assumptions)
No items to report.
(Changes in the fiscal year of consolidated subsidiaries)
Previously, among consolidated subsidiaries of the Company, ALPS LOGISTICS HONG KONG LTD., ALPS
LOGISTICS (S) PTE. LTD., ALPS NAIGAI LOGISTICS (MALAYSIA) SDN. BHD., TIANJIN ALPS TEDA
LOGISTICS CO., LTD., ALPS LOGISTICS (SHANGHAI) CO., LTD., ALPS LOGISTICS (GUANGDONG)
CO., LTD., ALPS LOGISTICS (USA), INC., DALIAN ALPS TEDA LOGISTICS CO., LTD., SHANGHAI ALPS
LOGISTICS CO., LTD., ALPS LOGISTICS MEXICO, S. A. DE C. V., ALPS LOGISTICS (THAILAND) CO.,
LTD., ALPS LOGISTICS TAIWAN CO., LTD., ALPS LOGISTICS KOREA CO., LTD., ALPS LOGISTICS
(CHONGQING) CO., LTD., ALPS LOGISTICS EUROPE GmbH, ALPS LOGISTICS VIETNAM CO., LTD.,
ALPS LOGISTICS MEXICO EXPRESS, S. A. DE C. V., and TEDA ALPS LOGISTICS SHANGHAI CO., LTD.,
whose closing date was December 31, used the financial statements as of that date and made necessary adjustments
for significant transactions that occurred between December 31 and March 31, the consolidated closing date. In
order to better understand management information and disclose annual consolidated financial statements, the
method has been changed from the ended March 31, 2020, and these consolidated companies carry out the annual
provisional settlement of accounts as at the annual consolidated closing date.
The profit and loss of the consolidated subsidiaries for the period from January 1, 2019 to March 31, 2019 is
adjusted as the change in retained earnings.
(Important matters underlying the preparation of consolidated financial statements)
1. Matters concerning scope of consolidation
The Company has 88 consolidated subsidiaries.
ALPS LOGICOM INDIA PRIVATE LIMITED, which was newly established, ZHAOPU
ELECTRONICS(SHANGHAI) INC. whose equity was acquired by the company, have been included in the scope of
consolidation from the fiscal year ended March 31, 2020.
FAITAL S.p.A., FAITAL U.S.A., INC., and Magyarországi Hangszórógyártó Kft., which were affiliates not
accounted for by the equity method, have been included in the scope of consolidation from the current fiscal year due
to the acquisition of additional shares.
Two Companies including ALPS ELECTRIC (UK) LIMITED, were excluded from the scope of consolidation
because they were liquidated.
The Company has three non-consolidated subsidiaries, including ALPINE DO BRASIL LTDA. All of those non-
consolidated companies are immaterial in terms of total assets, net sales, net income (equity equivalent) and retained
earnings (equity equivalent) and have not had a significant impact on the consolidated financial statements as a whole
and therefore, they were excluded from the scope of consolidation.
2. Matters concerning the application of the equity method
Investments in the following two affiliates are accounted for by the equity method:
Device & System Platform Development Center, NEUSOFT REACH AUTOMOTIVE TECHNOLOGY
(SHANGHAI)CO. LTD..
The Company has three non-consolidated subsidiaries including ALPINE DO BRASIL LTDA. and four affiliates
not accounted for by the equity method. All of those companies are immaterial in terms of net income (equity
equivalent) and retained earnings (equity equivalent) and have not had a significant impact on the consolidated
financial statements as a whole. As such, the equity method has not been applied to those companies.
- 17 -
NEUSOFT XIKANG ALPS (SHENYANG) TECHNOLOGY CO., LTD., was excluded from the application of
the equity method because it was liquidated. Two companies, NEUSOFT CORPORATION, DALIAN NEUSOFT
HOLDINGS CO., LTD., were excluded from the application of the equity method due to a decline in influence.
If the closing date of a company accounted for by the equity method is different from the consolidated closing
date, the financial statements for each affiliate’s fiscal year are used for consolidation, but the consolidated financial
statements are adjusted to include significant transactions that occurred during the period between each affiliate’s
closing date and the consolidated closing date.
(Omission of disclosures)
Disclosures of notes regarding changes in presentation, consolidated balance sheet, consolidated statement of
income and comprehensive income, consolidated statement of changes in net assets, consolidated statement of cash
flows, lease transactions, financial instruments, securities, derivative transactions, retirement benefits, stock options,
tax effect accounting, asset retirement obligations, real estate for lease, and related party information are omitted
because we believe those information is not significant enough to be disclosed in this report.
(Segment information)
a. Segment information
1. Overview of reportable segment
The Company's operating segments are components of its business for which separate financial information is
available and which are subject to periodic review by the Board of Directors in order to decide how resources should
be allocated and to evaluate financial results.
The Company has group companies for each product and service, and the Company and each group company
formulate comprehensive strategies for the products and services we deliver and conduct our business activities.
The Company consists of segments which are classified based on types of products and services and similarities
of sales market and it has three reportable segments: Electronic Components Segment, Automotive Infotainment
Segment and Logistics Segment.
The Electronic Components Segment develops, manufactures and sells various electronic components. The
Automotive Infotainment Segment develops, manufactures and sells in-car audio equipment and information and
communication equipment. The Logistics Segment provides transportation, storage, forwarding and other services.
2. Calculation method for net sales, profit/loss, assets, liabilities and other items by reportable segment
Income of reportable segments is based on operating income. Intersegment sales and transfers are based on
actual transactions.
3. Information concerning net sales, profit/loss, assets, liabilities and other items by reportable segment
For the fiscal year ended March 31, 2019 (from April 1, 2018 to March 31, 2019)
(Millions of yen)
Reportable segment
Other
(Note 1) Total
Adjustments
(Note 2)
Amount on
consolidated
financial
statements
(Note 3)
Electronic
Components
Segment
Automotive
Infotainment
Segment
Logistics
Segment Sub-total
Net sales
External 468,605 303,593 66,888 839,087 12,244 851,332 - 851,332
Inter-segment sales and
transfers 15,663 7,576 38,031 61,271 14,993 76,265 (76,265) -
Total 484,269 311,170 104,919 900,359 27,238 927,597 (76,265) 851,332
Segment profit 29,607 13,921 4,722 48,250 1,430 49,681 (39) 49,641
Segment assets 473,866 218,143 75,603 767,614 44,057 811,672 (135,955) 675,717
- 18 -
Segment liabilities 198,580 79,632 25,082 303,295 37,818 341,114 (60,758) 280,356
Other items
Depreciation and
amortization 33,995 7,412 2,287 43,695 455 44,150 37 44,188
Increase in property, plant
and equipment and
intangible assets
33,210 13,597 5,533 52,341 562 52,903 24 52,928
(Note)
1. “Other” represents business segments not included in the reportable segments, and includes the development of systems, office
services, financing and leasing businesses.
2. The adjustments are as follows:
(1) The adjustment of ¥(39) million to segment profit represents reclassification adjustments upon consolidation and eliminations
of inter-segment transactions.
(2) The adjustment of ¥(135,955) million to segment assets represents eliminations of inter-segment transactions.
(3) The adjustment of ¥(60,758) million to segment liabilities represents eliminations of inter-segment transactions.
3. Segment profit is reconciled to operating income of the consolidated financial statements
For the fiscal year ended March 31, 2020 (from April 1, 2019 to March 31, 2020)
(Millions of yen)
Reportable segment
Other
(Note 1) Total
Adjustments
(Note 2)
Amount on
consolidated
financial
statements
(Note 3)
Electronic
Components
Segment
Automotive
Infotainment
Segment
Logistics
Segment Sub-total
Net sales
External 424,709 306,299 66,872 797,881 12,688 810,570 - 810,570
Inter-segment sales and
transfers 13,633 7,389 33,869 54,892 12,800 67,692 (67,692) -
Total 438,343 313,689 100,741 852,773 25,488 878,262 (67,692) 810,570
Segment profit 16,124 5,655 4,118 25,897 1,202 27,100 (304) 26,795
Segment assets 427,164 216,531 78,451 722,148 46,455 768,604 (143,062) 625,542
Segment liabilities 185,367 85,075 26,887 297,330 40,159 337,489 (67,563) 269,926
Other items
Depreciation and
amortization 33,402 8,801 3,363 45,566 488 46,055 2 46,057
Increase in property, plant
and equipment and
intangible assets
25,729 11,587 4,555 41,872 828 42,701 (338) 42,362
(Note)
1. “Other” represents business segments not included in the reportable segments, and includes the development of systems, office
services, financing and leasing businesses.
2. The adjustments are as follows:
(1) The adjustment of ¥(304) million to segment profit represents reclassification adjustments upon consolidation and eliminations
of inter-segment transactions.
(2) The adjustment of ¥(143,062) million to segment assets represents eliminations of inter-segment transactions.
(3) The adjustment of ¥(67,563) million to segment liabilities represents eliminations of inter-segment transactions.
3. Segment profit is reconciled to operating income of the consolidated financial statements.
b. Relevant information
For the fiscal year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)
1. Information by product and service
This information is omitted because such information is disclosed in “Segment information”.
- 19 -
2. Geographic information
(1) Net sales
(Millions of yen)
China Japan United States Germany Others Total
167,809 158,237 136,435 80,659 308,190 851,332
(Note) Net sales are attributed by country or region based on the customers’ locations.
(2) Property, plant and equipment
(Millions of yen)
Japan China Others Total
112,858 38,404 36,382 187,646
3. Information on major customers
This information is omitted because there are no customers that account for 10% or more of net sales in the
consolidated statements of income and comprehensive income
For the fiscal year ended March 31, 2020 (from April 1, 2019 to March 31, 2020)
1. Information by product and service
This information is omitted because such information is disclosed in “Segment information”.
2. Geographic information
(1) Net sales
(Millions of yen)
China Japan United States Germany Others Total
155,522 154,466 133,676 86,637 280,267 810,570
(Note) Net sales are attributed by country or region based on the customers’ locations.
(2) Property, plant and equipment
(Millions of yen)
Japan China Others Total
109,882 30,591 37,391 177,865
3. Information on major customers
This information is omitted because there are no customers that account for 10% or more of net sales in the
consolidated statements of income and comprehensive income.
c. Information concerning impairment loss on non-current assets by reportable segment
For the fiscal year ended March 31, 2019 (from April 1, 2018 to March 31, 2019)
(Millions of yen)
Electronic
Components Segment
Automotive
Infotainment Segment
Logistics Segment Other All/Elimination Total
Impairment loss 1,583 - 255 - - 1,839
For the fiscal year ended March 31, 2020 (from April 1, 2019 to March 31, 2020)
(Millions of yen)
Electronic
Components
Segment
Automotive
Infotainment
Segment
Logistics Segment Other All/Elimination Total
Impairment loss 2,527 - 160 - - 2,688
- 20 -
d. Information concerning amortization of goodwill unamortized balance by reportable segment
This information is omitted because the amount is insignificant.
e. Information concerning gain on negative goodwill by reportable segment
(from April 1, 2018 to March 31, 2019) No items to report.
(from April 1, 2019 to March 31, 2020) As the monetary importance is low, the description is omitted.
(Per share information)
For the fiscal year ended March 31,
2019
(from April 1, 2018 to March 31,
2019)
For the fiscal year ended March 31,
2020
(from April 1, 2019 to March 31,
2020)
Net assets per share 1,731.36 yen 1,587.06 yen
Earnings (loss) per share 110.19 yen (19.53) yen
Diluted earnings per share 110.14 yen -yen
Further, regarding diluted earnings per share for this fiscal year, although there are diluted earnings, not stated as it is a
loss per share.
(Note 1) The basis for calculating book-value per share is as follows:
As of March 31, 2019 As of March 31, 2020
Total net assets (millions of yen) 395,360 355,615
Amount deducted from total net assets (millions of yen) 30,014 31,151
(Subscription rights to shares (millions of yen)) (361) (278)
(Non-controlling interests (millions of yen)) (29,652) (30,872)
Total net assets related to common stock at the end of the
year (millions of yen) 365,346 324,464
Number of common stock used in calculating net assets per
share at the end of the year (thousand) 211,016 204,443
(Note 2) The basis for calculating earnings(loss) per share and diluted earnings per share is as follows:
For the fiscal year ended March
31, 2019 (from April 1, 2018 to
March 31, 2019)
For the fiscal year ended March
31, 2020 (from April 1, 2019 to
March 31, 2020)
Earnings (loss) per share
Net income (loss) attributable to owners of parent (millions
of yen) 22,114 (4,009)
Amount not attributable to common shareholders (millions
of yen) - -
Net income (loss) attributable to owners of parent related to
common stock (millions of yen) 22,114 (4,009)
Average number of shares during the year (thousand) 200,694 205,306
Diluted earnings per share
Adjustment to net income attributable to owners of parent
(millions of yen) - -
Increase in number of common stock (thousand) 94 -
(Subscription rights to shares) (94) (-)
Summary of dilutive shares that were not included in the
calculation of diluted earnings per share because they have
no dilutive effect
- -
- 21 -
(Subsequent events)
(Transactions under common control)
The Company resolved at its board of directors meeting held on October 30, 2019 to succeed the entire
business of Alpine Electronics, Inc. (“Alpine” and, together with the Company, the “Companies”), a wholly
owned subsidiary of the Company, through an absorption-type company split (the “Company Split”), except for
ownership and management of trademark rights related to commercial products sold under “Alpine” brand and
shares of subsidiaries. Based on the resolution, the Companies executed an absorption-type company split
agreement as of the same date. Based on this agreement the Company is the succeeding company and the Alpine
is the splitting company on April 1, 2020.
1.Outline of the transaction
(1) Name and details of the business subject to the transaction
Name of the business: Automotive Infotainment Business
Details of the business: Businesses related to audio equipment and information and communication
equipment
(2) Date of business combination: April 1, 2020
(3) Legal form of business combination
A simplified absorption-type company split under which Alpine is to be split and the Company becomes
the successor. (4) Name of the company after the business combination
ALPS ALPINE CO., LTD (5) Other matters concerning the overview of the transaction
i. Purpose of the transaction
In order to realize our vision of becoming an “Innovative T-Shaped Company (ITC101)” as raised
in the Mid-Term Business Plan announced on April 26, 2019, the Company has been working on the
reform of the business structure aimed at promoting One ALPSALPINE. As part of the structural
reform, the Company has decided to transfer Alpine’s entire business to the Company in order to
facilitate more efficient and agile management. Through this transfer, we will accelerate the evolution
into a “T-shaped Company” that is capable of undertaking a diverse range of businesses to meet
customer needs, from devices to system services, and pursue early creation of integration synergies.
ii. Details of allotment in the company split
The company split will not entail allotment of shares or other monetary consideration.
ⅲ. Operating Results of the Division to be Succeeded (for the fiscal year ended March 31, 2020)
Net Sales ¥164,854 million
Operating income ¥(10,859) million
Ordinary income ¥(5,543) million
ⅳ. Asset and Liability Items and Amounts to be Assumed (as of March 31, 2020)
(Millions of yen)
Assets Liabilities
Item Book value Item Book value
Current assets 46,146 Current liabilities 40,193
Non-current assets 35,519 Non-current liabilities 1,745
Total 81,665 Total 41,938
2. Overview of accounting treatment
It will be accounted for as a transaction under common control in accordance with “Accounting Standard
for Business Combinations” (Accounting Standards Board of Japan Statement No. 21, January 16, 2019) and
“Implementation Guidance on Accounting Standard for Business Combinations and Accounting Standard for
Business Divestitures” (Accounting Standards Board of Japan Guidance No. 10, January 16, 2019).
- 22 -
6. Non-consolidated Financial Statements
(1) Balance sheet
(Millions of yen)
As of
March 31, 2019
As of
March 31, 2020
Assets
Current assets
Cash and deposits 29,264 16,025
Notes receivable 791 729
Accounts receivable - trade 78,262 67,545
Merchandise and finished goods 13,829 9,805
Work in process 4,495 5,940
Raw material and supplies 5,472 4,646
Advance payments 183 15
Prepaid expenses 1,414 1,334
Accounts receivable - other 11,392 10,438
Income taxes receivable 1,458 1,112
Short-term loans receivable from subsidiaries and
affiliated companies 22,442 22,205
Others 2,047 50
Allowance for doubtful accounts (62) (0)
Total current assets 170,993 139,849
Non-current assets Property, plant and equipment
Buildings 19,273 18,448
Structures 1,159 1,114
Machinery and equipment 29,118 22,889
Vehicles 77 82
Tools, furniture and fixtures 3,313 2,385
Molds 3,143 1,781
Land 17,252 17,272
Construction in progress 5,672 5,727
Total property, plant and equipment, net 79,009 69,702
Intangible assets Patent right 77 61
Leasehold right 236 236
Trademark right 26 23
Software 10,972 10,360
Telephone subscription right 42 40
Right of using facilities 1 1
Total intangible assets, net 11,355 10,723
Investments and other assets Investment securities 1,377 2,643
Shares of subsidiaries and affiliated companies 89,725 89,607
Investments in capital 11 337
Investments in capital of subsidiaries and affiliated
companies 11,154 11,154
Long-term loans receivable from employees 93 64
Claims provable in rehabilitation 803 488
Long-term prepaid expenses 419 226
Prepaid pension cost 115 116
Guarantee deposits 66 59
Deferred tax assets 9,281 4,231
Others 57 57
Allowance for doubtful accounts (831) (516)
Total investments and other assets 112,274 108,470
Total non-current assets 202,639 188,896
Total assets 373,633 328,745
- 23 -
(Millions of yen)
As of
March 31, 2019
As of
March 31, 2020
Liabilities
Current liabilities
Accounts payable - trade 44,569 40,050
Short-term borrowings 21,594 21,300
Current portion of long-term borrowings 1,000 23,000
Lease obligations 39 15
Accounts payable - other 15,126 14,619
Accrued expenses 3,241 3,174
Accrued income taxes 177 317
Advance received 247 67
Deposits received 217 219
Provision for bonuses 4,742 4,311
Provision for directors’ bonuses 31 27
Provision for product warranties 1,954 1,850
Provision for loss on inventory 429 556
Others 159 117
Total current liabilities 93,531 109,629
Non-current liabilities
Long-term borrowings 64,000 42,000
Lease obligations 38 23
Long-term accounts payable - other 133 133
Provision for retirement benefits 3,398 2,807
Provision for environmental measures 590 590
Asset retirement obligations 414 427
Others 88 87
Total non-current liabilities 68,663 46,070
Total liabilities 162,194 155,699
Net assets
Shareholders’ equity
Common stock 38,730 38,730
Capital surplus
Legal capital surplus 99,993 99,993
Other capital surplus 3,532 3,520
Total capital surplus 103,525 103,514
Retained earnings
Other retained earnings
Retained earnings brought forward 86,896 62,766
Total retained earnings 86,896 62,766
Treasury stock (18,341) (32,290)
Total shareholders’ equity 210,811 172,720
Valuation and translation adjustments
Unrealized gains on securities 331 100
Total valuation and translation adjustments 331 100
Subscription rights to shares 295 225
Total net assets 211,438 173,046
Total liabilities and net assets 373,633 328,745
- 24 -
(2) Statement of income
(Millions of yen)
Fiscal year ended
March 31, 2019 Fiscal year ended
March 31, 2020
Net sales 394,661 357,168 Cost of sales 336,666 312,965
Gross profit 57,995 44,203
Selling, general and administrative expenses 51,393 51,727
Operating income (loss) 6,602 (7,524)
Non-operating income Dividend income 12,632 8,581 Miscellaneous income 898 1,444
Total non-operating income 13,531 10,026
Non-operating expenses Interest expense 507 576 Foreign exchange losses - 1,443 Commission fee 1,398 1,325 Miscellaneous expenses 500 944
Total non-operating expense 2,406 4,290
Ordinary income (loss) 17,726 (1,788)
Extraordinary income
Gain on insurance income for loss on disaster - 2,222 Others 927 93
Total extraordinary income 927 2,316
Extraordinary loss Impairment loss 1,583 7,459 Loss on valuation of investment securities 359 1,054 Loss on disaster - 1,507 Others 185 178
Total extraordinary loss 2,128 10,200
Income before income taxes (loss) 16,525 (9,672)
Current income taxes 393 (61) Deferred income taxes 157 5,150
Total income taxes 551 5,088
Net income (loss) 15,974 (14,760)
- 25 -
(3) Statement of changes in net assets
For the fiscal year ended March 31, 2019 (from April 1, 2018 to March 31, 2019) (Millions of yen)
Shareholders’ equity
Common stock
Capital surplus Retained earnings
Treasury stock
Total
shareholders’ equity
Legal capital surplus
Other capital surplus
Total capital surplus
Other retained
earnings Total
retained earnings
Retained
earnings brought
forward
Balance at the beginning of the year 38,730 53,830 3,514 57,344 79,737 79,737 (3,497) 172,314
Changes during the year
Dividends (8,815) (8,815) (8,815)
Net income (loss) 15,974 15,974 15,974
Purchase of treasury stock (17,762) (17,762)
Disposal of treasury stock 17 17 33 51
Share exchange 46,163 46,163 2,884 49,048
Changes in items other than
shareholders' equity, net
Total changes during the year - 46,163 17 46,181 7,158 7,158 (14,843) 38,496
Balance at the end of the year 38,730 99,993 3,532 103,525 86,896 86,896 (18,341) 210,811
Valuation and translation
adjustments Subscription
rights to shares Total net assets
Unrealized
gains on
securities
Total valuation
and translation
adjustments
Balance at the beginning of the year 819 819 180 173,315
Changes during the year
Dividends (8,815)
Net income (loss) 15,974
Purchase of treasury stock (17,762)
Disposal of treasury stock 51
Share exchange 49,048
Changes in items other than
shareholders' equity, net (487) (487) 115 (372)
Total changes during the year (487) (487) 115 38,123
Balance at the end of the year 331 331 295 211,438
- 26 -
For the fiscal year ended March 31, 2020 (from April 1, 2019 to March 31, 2020) (Millions of yen)
Shareholders’ equity
Common
stock
Capital surplus Retained earnings
Treasury
stock
Total
shareholders’
equity
Legal capital
surplus
Other capital
surplus
Total capital
surplus
Other retained
earnings Total
retained
earnings
Retained
earnings
brought forward
Balance at the beginning of the year 38,730 99,993 3,532 103,525 89,896 86,896 (18,341) 210,811
Changes during the year
Dividends (9,368) (9,368) (9,368)
Net income (loss) (14,760) (14,760) (14,760)
Purchase of treasury stock (14,106) (14,106)
Disposal of treasury stock (11) (11) 157 145
Share exchange -
Changes in items other than
shareholders' equity, net
Total changes during the year - - (11) (11) (24,129) (24,129) (13,949) (38,090)
Balance at the end of the year 38,730 99,993 3,520 103,514 62,766 62,766 (32,290) 172,720
Valuation and translation adjustments
Subscription
rights to shares Total net assets
Unrealized
gains (losses)
on securities
Total valuation
and translation
adjustments
Balance at the beginning of the year 331 331 295 211,438
Changes during the year
Dividends (9,368)
Net income (loss) (14,760)
Purchase of treasury stock (14,106)
Disposal of treasury stock 145
Share exchange -
Changes in items other than
shareholders' equity, net (231) (231) (70) (301)
Total changes during the year (231) (231) (70) (38,391)
Balance at the end of the year 100 100 225 173,046
- 27 -
7. Other
(1) Sales results of the Electronic Components Segment
Sales results of Electronic Components Segment for the fiscal year ended March 31, 2020 are as follows:
For the fiscal year ended
March 31, 2019
(from April 1, 2018 to March 31,
2019)
For the fiscal year ended
March 31, 2020
(from April 1, 2019 to March 31,
2020)
Changes in net sales
Net sales
(Millions of yen)
Percentage
(%)
Net sales
(Millions of yen)
Percentage
(%)
Amount
(Millions of yen)
Percentage
(%)
Electronic Components Segment 468,605 55.0 424,709 52.4 (43,895) (9.4)
Automotive market 277.883 32.6 242,084 29.9 (35,798) (12.9)
Consumer market 190,722 22.4 182,625 22.5 (8,097) (4.2)
(Note) Percentage represents ratio to the consolidated net sales.
(2) Change of Directors and Officers (expected effective date is June 24, 2020)
(i) Candidate for Director to be newly appointed who are not Members of Audit and Supervisory Committee
Director Tetsuhiro Saeki Senior Vice President, CMO, Information Systems
Director Naofumi Fujie Aisin Seiki Co., Ltd.
Senior Executive Advisor
Director Noriko Oki Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
Investment Banking Business Unit
Senior Advisor
* Naofumi Fujie and Noriko Oki are candidates for outside director.
(ii) Candidate for Director to be newly appointed who are Members of Audit and Supervisory Committee
Director Toshinori Kobayashi Vice President, Corporate Planning, Accounting & Finance
(iii) Retiring Directors
Satoshi Kinoshita Director (Outside)
Shinji Maeda Director, Audit and Supervisory Committee Members
(iv) Officers to be appointed
Officer Wilfried Baumann President, ALPS ALPINE EUROPE GmbH
Officer Hiroaki Kiba Senior Manager, Sales Planning Office
Officer Junji Kobayashi General Manager, Corporate Planning Operations & Senior
Manager, Corporate Planning Office
(v) Retiring Officers
Yoichiro Kega Vice President, HR & General Affairs, Legal, Export & Import
Administration
Toshinori Kobayashi Vice President, Corporate Planning, Accounting & Finance
Shinji Inoue Vice President, Automotive Sales & Marketing
* Toshinori Kobayashi is a candidate for members of audit and supervisory committee.
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