| Imagery Source: Tokyo Electron Limited |
| Information Source: Tokyo Electron Limited |
| 1. Business Results |
| (1) Overview of Operating Results |
| Concerning the global economy in the first quarter of the current fiscal year, despite the concerns about increasing geopolitical risks, inflation in Europe and the United States remained around 2% and overall economic conditions were strong. |
| In the electronics industry, where the Tokyo Electron (TEL) Group operates, there was a sluggish demand for general-purpose semiconductors for automobiles and industry. However, the overall semiconductor market grew, driven by the increasing demand for AI servers used in data centres in conjunction with the spread of generative AI. |
| Under these circumstances, in the semiconductor production equipment market during the first quarter of the current fiscal year, capital investment in mature generation equipment in China showed signs of slowing compared to the same period of the previous fiscal year. However, there was substantial growth in capital investment in memory and advanced packages for generative AI. |
| Against the backdrop of the transition to a data-driven society accompanied by the advancement of information and communication technology, the evolution of AI to enhance productivity and create new value, and efforts towards a decarbonised society, the role of semiconductors and their technological innovation are becoming increasingly important. Consequently, the semiconductor production equipment market is also expected to grow even further in the medium- to long-term. |
| As a result, the consolidated financial results (cumulative) for the first quarter of the current fiscal year were net sales of 549,586 million yen (year-on-year decline of 1.0%), operating income of 144,694 million yen (year-on-year decline of 12.7%), ordinary income of 147,347 million yen (year-on-year decline of 12.0%), and net income attributable to owners of parent of 117,801 million yen (year-on-year decline of 6.6%). |
| The TEL Group has a single segment of "Semiconductor Production Equipment", and therefore, information by segment has been omitted. |
| (2) Overview of Financial Conditions |
| Current assets at the end of the first quarter of the current fiscal year were 1,593,227 million yen, a decrease of 207,528 million yen compared to the end of the previous fiscal year. This was mainly due to a decrease of 92,336 million yen in notes and accounts receivable-trade, and contract assets, a decrease of 68,730 million yen in cash and deposits, a decrease of 59,998 million yen in securities, and an increase of 16,036 in merchandise and finished goods. |
| Property, plant and equipment increased by 38,623 million yen from the end of the previous fiscal year to 480,330 million yen. |
| Intangible assets decreased by 281 million yen from the end of the previous fiscal year to 35,568 million yen. Investments and other assets increased by 52,532 million yen from the end of the previous fiscal year to 400,201 million yen. |
| As a result, total assets decreased by 116,653 million yen from the end of the previous fiscal year to 2,509,327 million yen. |
| Current liabilities decreased by 141,678 million yen from the end of the previous fiscal year to 536,246 million yen. This was largely due to a decrease of 66,454 million yen in income taxes payable, a decrease of 34,888 million yen in provision for employees’ bonuses, a decrease of 23,452 million yen in accrued consumption tax, and a decrease of 17,866 million yen in advances received. |
| Non-current liabilities increased by 7,487 million yen from the end of the previous fiscal year to 100,334 million yen. Net assets increased by 17,537 million yen from the end of the previous fiscal year to 1,872,746 million yen. This was largely due to an increase of 117,801 million yen resulting from recording net income attributable to owners of parent, an increase of 45,860 million yen in net unrealized gains on available-for-sale securities, an increase of 5,318 million yen in foreign currency translation adjustments, and a decrease resulting from the payment of 150,254 million yen in year-end dividends for the previous fiscal year. |
| As a result, the equity ratio was 74.0%. |
| (3) Overview of Cash Flows |
| Cash and cash equivalents at the end of the first quarter of the current fiscal year decreased by 128,790 million yen compared to the end of the previous fiscal year, to 356,281 million yen. The combined balance, including 11,228 million yen in time deposits and short-term investments with maturities of more than three months that are not included in cash and cash equivalents, was 367,510 million yen, a decrease of 128,728 million yen from the end of the previous fiscal year. The overall situation regarding cash flows during the first quarter of the current fiscal year was as described below. |
| Cash flows from operating activities were positive 74,955 million yen, a decrease of 108,823 million yen compared to the same period of the previous fiscal year. The major positive factors were 151,966 million yen in income before income taxes and a decrease of 94,146 million yen in notes and accounts receivable - trade and contract assets. The major negative factors were 99,924 million yen in payment of income taxes, a decrease of 34,995 million yen in provision for employees' bonuses, and a decrease of 23,441 million yen in accrued consumption tax. |
| Cash flows from investing activities were negative 54,178 million yen compared to negative 37,330 million yen in the same period of the previous fiscal year. This was largely due to the payment of 51,018 million yen for the purchase of property, plant and equipment. |
| Cash flows from financing activities were negative 151,134 million yen compared to negative 194,433 million yen in the same period of the previous fiscal year. This was largely due to the payment of 150,254 million yen in dividends. |
| (4) Description of Financial Estimates Information, such as Consolidated Financial Forecasts |
| (i) Consolidated Financial Forecast Revision |
| With the transition to a data-driven society following advances in information and communication technology, the evolution of AI aimed at improving productivity and creating new value, and efforts to achieve a decarbonised society, the importance of technological innovation in semiconductors continues to grow. Consequently, the semiconductor production equipment market is expected to keep expanding. However, based on adjustments in capital investment plans by semiconductor manufacturers, we would like to revise the consolidated financial forecasts for the full year ending March 31, 2026, which were announced on April 30, 2025 |
| (ii) Dividends Forecast Revision |
| Our dividend policy is to link dividend payments to business performance on an ongoing basis. Our basic policy for returning profits to shareholders is to maintain a payout ratio of around 50% based on consolidated net income attributable to the owners of the parent. Due to the revision of our consolidated financial forecasts mentioned earlier, we would like to revise the annual dividends forecast from 618 yen per share as announced on April 30, 2025, to 485 yen per share (Interim dividends: 245 yen, Year-end dividends: 240 yen). |
| For the full document, click the link below |
| Tokyo Electron Limited |
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