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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Mitsubishi Electric Corporation | LSE:MEL | London | Ordinary Share | JP3902400005 | COM STK Y50 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1,886.8026 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
TIDMMEL
RNS Number : 2117X
Mitsubishi Electric Corporation
26 April 2019
Hot Features
Premium
FOR IMMEDIATE RELEASE No. 3278
Investor Relations Inquiries Media Inquiries
Investor Relations Group, Corporate Public Relations Division
Finance Division
Mitsubishi Electric Corporation Mitsubishi Electric Corporation
Cad.Irg@rk.MitsubishiElectric.co.jp prd.gnews@nk.MitsubishiElectric.co.jp
www.MitsubishiElectric.com/news/
Mitsubishi Electric Announces Consolidated Financial Results for Fiscal 2019
TOKYO, April 26, 2019 - Mitsubishi Electric Corporation (TOKYO: 6503) announced today its consolidated financial results for fiscal 2019 (April 1, 2018- March 31, 2019).
Consolidated Financial Results
Revenue: 4,519.9 billion (2% increase from the previous
yen fiscal year)
Operating profit: 290.4 billion (11% decrease from the previous
yen fiscal year)
Profit before income 315.9 billion (11% decrease from the previous
taxes: yen fiscal year)
Net profit attributable 226.6 billion (11% decrease from the previous
to Mitsubishi Electric yen fiscal year)
Corp. stockholders:
During the fiscal year ended March 31, 2019, the economy saw a buoyant expansion in the U.S. and a slight slowdown in the Chinese economy, while there were gradual trends of recovery in Japan and Europe despite a recent slowdown in some indicators such as export and production. In addition, the yen, compared to the previous fiscal year, was substantially unchanged against the U.S. dollar, and remained strong against the euro in and after August.
Under these circumstances, the Mitsubishi Electric Group has been working even harder than before to promote growth strategies rooted in its advantages, while continuously implementing initiatives to strengthen its competitiveness and business structure.
As a result, the Mitsubishi Electric Group has recorded a revenue of 4,519.9 billion yen for fiscal 2019, an increase of 2% compared to the previous fiscal year, with increased revenue mainly in the Energy and Electric Systems, Industrial Automation Systems and Home Appliances segments.
Consolidated operating profit decreased by 11% compared to the previous fiscal year to 290.4 billion yen, due to decreased profits in the Industrial Automation Systems and Electronic Devices segments.
Profit before income taxes decreased by 11% compared to the previous fiscal year to 315.9 billion yen, and net profit attributable to Mitsubishi Electric Corporation stockholders decreased by 11% compared to the previous fiscal year to 226.6 billion yen.
Consolidated Financial Results by Business Segment
Energy and Electric Systems
Revenue: 1,296.7 billion (3% increase from the previous fiscal
yen year which recorded 1,253.0 billion
yen)
Operating profit: 82.5 billion (17.0 billion yen increase from
yen the previous fiscal year which recorded
65.4 billion yen)
The social infrastructure systems business remained substantially unchanged in orders compared to the previous fiscal year, while revenue increased compared to the previous fiscal year due primarily to increases in the transportation systems business inside and outside Japan and the power systems business in Japan.
The building systems business remained substantially unchanged in both orders and revenue compared to the previous fiscal year, experiencing a decrease in the new installation of elevators and escalators in China and buoyant growth in the renewal business in Japan and other factors.
As a result, revenue for this segment increased by 3% from the previous fiscal year to 1,296.7 billion yen. Operating profit increased by 17.0 billion yen from the previous fiscal year to 82.5 billion yen due primarily to an increase in revenue.
Industrial Automation Systems
Revenue: 1,467.6 billion (2% increase from the previous fiscal
yen year which recorded 1,444.9 billion
yen)
Operating profit: 142.5 billion (44.7 billion yen decrease from
yen the previous fiscal year which recorded
187.3 billion yen)
The factory automation systems business saw decreases in both orders and revenue from the previous fiscal year due primarily to a decrease in capital expenditures in the fields of organic light emitting diodes (OLED) and smartphones outside Japan, despite buoyant demand in Japan.
The automotive equipment business saw increases in both orders and revenue from the previous fiscal year due primarily to increases in Japan, Europe and other markets in Asia, as well as increased revenue in electric-vehicle related equipment in response to market growth worldwide.
As a result, revenue for this segment increased by 2% from the previous fiscal year to 1,467.6 billion yen. Operating profit decreased by 44.7 billion yen from the previous fiscal year to 142.5 billion yen due primarily to a shift in product mix, increases in material prices and upfront investment for growth drivers.
Information and Communication Systems
Revenue: 426.2 billion (3% decrease from the previous fiscal
yen year which recorded 438.1 billion
yen)
Operating profit: 12.2 billion (0.9 billion yen increase from the
yen previous fiscal year which recorded
11.3 billion yen)
The telecommunications systems business saw decreases in both orders and revenue compared to the previous fiscal year due primarily to decreased demand in communications infrastructure equipment.
The information systems and service business remained substantially unchanged in orders, while revenue increased compared to the previous fiscal year owing to an increase in the system integrations business.
The electronic systems business saw a decrease in orders compared to the previous fiscal year mainly due to a decrease in the space systems business, while revenue experienced a decrease compared to the previous fiscal year due primarily to a decrease in the defense systems business.
As a result, revenue for this segment decreased by 3% from the previous fiscal year to 426.2 billion yen. Operating profit increased by 0.9 billion yen from the previous fiscal year to 12.2 billion yen due primarily to a shift in project portfolios.
Electronic Devices
Revenue: 199.9 billion (1% decrease from the previous
yen fiscal year which recorded 202.2
billion yen)
Operating profit: 1.4 billion (12.7 billion yen decrease from
yen the previous fiscal year which
recorded 14.1 billion yen)
The electronic devices business saw a decrease in orders and revenue fell by 1% from the previous fiscal year to 199.9 billion yen mainly due to decreased demand for optical communication devices.
Operating profit decreased by 12.7 billion yen from the previous fiscal year to 1.4 billion yen due primarily to a decrease in revenue and a shift in product mix.
Home Appliances
Revenue: 1,074.0 billion (2% increase from the previous
yen fiscal year which recorded 1,049.3
billion yen)
Operating profit: 59.4 billion (3.9 billion yen increase from
yen the previous fiscal year which
recorded 55.4 billion yen)
The home appliances business saw a 2% increase in revenue from the previous fiscal year to 1,074.0 billion yen due to increases in revenue of air conditioners for Japan, Europe and North America.
Operating profit increased by 3.9 billion yen compared to the previous fiscal year to 59.4 billion yen due primarily to an increase in revenue.
Others
Revenue: 676.7 billion (3% increase from the previous
yen fiscal year which recorded 659.0
billion yen)
Operating profit: 24.1 billion (0.1 billion yen increase from
yen the previous fiscal year which
recorded 24.0 billion yen)
Revenue increased by 3% compared to the previous fiscal year to 676.7 billion yen mainly due to an increase in revenue at affiliated companies involved in logistics.
Operating profit increased by 0.1 billion yen from the previous fiscal year to 24.1 billion yen due primarily to an increase in revenue.
Fundamental Dividend Distribution Policy and FY2019 Dividend
Fundamental dividend distribution policy
Mitsubishi Electric's fundamental policy is to comprehensively promote improvement in shareholder profit from the viewpoints of appropriate profit distribution commensurate with earnings performance of the respective fiscal year, as well as strengthening our financial standing through the company's internal reserves, with the ultimate goal of enhancing corporate value.
FY 2019 dividend
Considering the company's business performance and financial conditions in fiscal 2019, the company has decided to pay a year-end retained earnings dividend of 26 yen per share for fiscal 2019. Adding the interim dividend of 14 yen per share, the total annual dividend will be 40 yen per share. Payment is planned to begin on June 4, 2019.
The retained earnings dividend for fiscal 2020 is still undecided.
cf. In fiscal 2018, interim dividend was 14 yen and year-end dividend was 26 yen per share. (Annual dividend of 40 yen per share)
Financial Standing
An analysis on the status of assets, liabilities and equity on a consolidated basis
Total assets as of the end of this fiscal year increased from the end of the previous fiscal year by 50.6 billion yen to 4,356.2 billion yen. The change in the balance of total assets was mainly due to increases in the balance of inventories by 82.8 billion yen and in trade receivables and contract assets by 42.3 billion yen, while cash and cash equivalents decreased by 84.9 billion yen.
Total liabilities decreased from the end of the previous fiscal year by 63.3 billion yen to 1,845.0 billion yen. The outstanding balances of bonds and borrowings decreased by 13.5 billion yen from the end of the previous fiscal year to 298.4 billion yen, resulting in a decline in the ratio of bonds and borrowings to total assets to 6.9%, representing a 0.3 point decrease compared to the end of the previous fiscal year. Meanwhile, trade payables decreased by 19.9 billion yen, and other current liabilities decreased by 34.0 billion yen.
Mitsubishi Electric Corporation stockholders' equity increased by 105.7 billion yen compared to the end of the previous fiscal year to 2,399.9 billion yen. The stockholders' equity ratio was recorded at 55.1%, representing a 1.8 point increase compared to the end of the previous fiscal year. The changes referred to above primarily resulted from an increase from recording a net profit attributable to Mitsubishi Electric Corporation stockholders of 226.6 billion yen, despite a decrease due to dividend payment of 85.8 billion yen and a decrease in other comprehensive income of 45.6 billion yen reflecting a fall in stock prices and the stronger yen.
An analysis on the status of cash flow on a consolidated basis
Cash flows from operating activities for this fiscal year decreased by 25.9 billion yen compared to the previous fiscal year to 239.8 billion yen (cash in) mainly due to a decrease in net profit. Cash flows from investing activities increased by 28.6 billion yen compared to the previous fiscal year to 210.6 billion yen (cash out), due primarily to a decrease in proceeds from sale of investment securities. As a result, free cash flow was 29.1 billion yen (cash in). Cash flows from financing activities were 112.0 billion yen (cash out) mainly due to dividend payments.
Current Forecast for Fiscal 2020
With uncertainty in the global economy due to factors such as U.S. trade policies and influences from Brexit, the global economy is expected to experience a slowdown in growth due to the U.S.-China trade friction making impact on exports and investments in various countries and regions, despite a gradual recovery trend in global business conditions.
Under these circumstances, the Mitsubishi Electric Group aims to achieve its management targets by uplifting its business performance and financial standings through initiatives such as promoting more strongly its global operations centered around its growth-driving businesses, continuously increasing and strengthening profitability in each business and continuously implementing various Group-wide business improvement measures.
The current financial performance forecast for fiscal 2020 follows below.
Current consolidated forecast for fiscal 2020
Revenue 4,630.0 billion (2% increase from fiscal
yen 2019)
Operating profit 295.0 billion (2% increase from fiscal
yen 2019)
Profit before income 320.0 billion (1% increase from fiscal
taxes yen 2019)
Net profit attributable 240.0 billion (6% increase from fiscal
to Mitsubishi Electric yen 2019)
Corp. stockholders
Exchange rates for this forecast is 105 yen to the US dollar, 125 yen to the euro and 16.0 yen to the Chinese yuan.
Note: The results forecast above is based on assumptions deemed reasonable by the company at the present time, and actual results may differ significantly from forecasts. Please refer to the cautionary statement at the end.
Policy Regarding Financial Reporting Standards
Mitsubishi Electric has voluntarily adopted International Financial Reporting Standards (IFRS) for its consolidated financial statements from the first quarter of the fiscal year ended March 31, 2019, in order to enhance international comparability of its financial information in the capital markets.
Consolidated Financial Results Summary
(In billions of yen except where noted)
FY '18 (A) FY '19 (B) B - A B/A (%)
(Apr. 1, 2017 (Apr. 1, 2018
- -
Mar. 31, 2018) Mar. 31, 2019)
---------------- ---------------- --------- --------
Revenue 4,444.4 4,519.9 75.4 102
---------------- ---------------- --------- --------
Operating profit 327.4 290.4 (36.9) 89
---------------- ---------------- --------- --------
Profit before income
taxes 353.2 315.9 (37.2) 89
---------------- ---------------- --------- --------
Net profit attributable
to
Mitsubishi Electric
Corp.
stockholders 255.7 226.6 (29.1) 89
---------------- ----------------
Basic earnings per
share attributable
to Mitsubishi Electric (13.(54)
Corp. stockholders 119.(19) yen 105.(65) yen yen) 89
============================== ================ ================ ========= ========
Dividend per share
Annual dividend 40 yen 40 yen _ 100
Interim dividend 14 yen 14 yen _
Year-end dividend 26 yen 26 yen _
---------------- ---------------- --------- --------
Notes:
1) Consolidated financial charts made in accordance with International Financial Reporting Standards (IFRS).
2) The company has 206 consolidated subsidiaries.
Consolidated Financial Statements
Consolidated Statements of Profit or Loss and Consolidated Statements of Comprehensive Income (Fiscal 2019)
(Consolidated Statements of Profit or Loss)
(In millions of yen)
FY '18 FY '19
(Apr. 1, 2017 (Apr. 1, 2018
- -
Mar. 31, 2018) Mar. 31, 2019)
(A) % of (B) % of B - A B/A
total total (%)
---------- -------
Revenue 4,444,424 100.0 4,519,921 100.0 75,497 102
Cost of sales 3,090,449 69.5 3,186,869 70.5 96,420 103
Selling, general and
administrative expenses 1,021,361 23.0 1,043,294 23.1 21,933 102
Other profit (loss) (5,170) (0.1) 719 0.0 5,889 -
Operating profit 327,444 7.4 290,477 6.4 (36,967) 89
Financial income 8,611 0.2 9,747 0.2 1,136 113
Financial expenses 6,796 0.2 4,382 0.1 (2,414) 64
Share of profit of investments
accounted for using the
equity method 23,947 0.5 20,116 0.5 (3,831) 84
---------------------------------- ---------- ------- ---------- ------- --------- -----
Profit before income
taxes 353,206 7.9 315,958 7.0 (37,248) 89
Income taxes 86,807 1.9 78,304 1.7 (8,503) 90
---------- ------- ---------- ------- --------- -----
Net profit 266,399 6.0 237,654 5.3 (28,745) 89
---------- ------- ---------- ------- --------- -----
Net profit attributable
to:
Mitsubishi Electric Corp.
stockholders 255,755 5.8 226,648 5.0 (29,107) 89
Non-controlling interests 10,644 0.2 11,006 0.3 362 103
---------- ------- ---------- ------- --------- -----
(Consolidated Statements of Comprehensive Income)
(In millions of yen)
FY '18 (A) FY '19 (B) B - A
(Apr. 1, 2017 (Apr. 1, 2018
- -
Mar. 31, 2018) Mar. 31, 2019)
---------------- ----------------
Net profit 266,399 237,654 (28,745)
---------------- ---------------- ----------
(Other comprehensive income
(loss),
net of tax)
Items that will not be reclassified
to
net profit
Changes in fair value of financial
assets measured at fair value
through other comprehensive
income (52) (39,284) (39,232)
------------------------------------------ ---------------- ---------------- ----------
Remeasurements of defined
benefit plans 21,323 12,234 (9,089)
------------------------------------------ ---------------- ---------------- ----------
Share of other comprehensive
income of investments accounted
for using the equity method 170 (995) (1,165)
---------------- ---------------- ----------
Subtotal 21,441 (28,045) (49,486)
---------------- ---------------- ----------
Items that may be reclassified
to net profit
Exchange differences on translating
foreign operations 16,992 (6,756) (23,748)
------------------------------------------ ---------------- ---------------- ----------
Net changes in the fair value
of cash flow hedges (71) (37) 34
------------------------------------------ ---------------- ---------------- ----------
Share of other comprehensive
income of investments accounted
for using the equity method 1,869 (2,645) (4,514)
---------------- ---------------- ----------
Subtotal 18,790 (9,438) (28,228)
---------------- ---------------- ----------
Total other comprehensive
income (loss) 40,231 (37,483) (77,714)
---------------- ---------------- ----------
Comprehensive income 306,630 200,171 (106,459)
---------------- ---------------- ----------
Comprehensive income attributable
to:
Mitsubishi Electric Corp.
stockholders 294,710 189,306 (105,404)
Non-controlling interests 11,920 10,865 (1,055)
---------------- ---------------- ----------
Consolidated Statements of Financial Position
(In millions of yen)
FY '18 (A) FY ' 19 (B) B - A
(ended Mar. (ended Mar.
31, 2018) 31, 2019)
--------------------- ---------------------
(Assets)
Current assets 2,582,735 2,624,293 41,558
Cash and cash equivalents 599,199 514,224 (84,975)
Trade receivables and contract
assets 1,191,529 1,233,916 42,387
Inventories 646,262 729,098 82,836
Other current assets 145,745 147,055 1,310
Non-current assets 1,722,845 1,731,918 9,073
Investments accounted for using
the equity method 194,308 197,959 3,651
Other financial assets 363,171 303,834 (59,337)
Property, plant and equipment 724,257 760,540 36,283
Other non-current assets 441,109 469,585 28,476
--------------------- --------------------- ---------
Total assets 4,305,580 4,356,211 50,631
========================================= ===================== ===================== =========
(Liabilities)
Current liabilities 1,488,249 1,416,335 (71,914)
Bonds and borrowings 122,895 104,969 (17,926)
Trade payables 579,566 559,641 (19,925)
Other current liabilities 785,788 751,725 (34,063)
Non-current liabilities 420,112 428,721 8,609
Bonds and borrowings 189,055 193,469 4,414
Retirement benefit liabilities 171,520 176,087 4,567
Other non-current liabilities 59,537 59,165 (372)
--------------------- --------------------- ---------
Total liabilities 1,908,361 1,845,056 (63,305)
--------------------- --------------------- ---------
(Equity)
Mitsubishi Electric Corp. stockholders'
equity 2,294,174 2,399,946 105,772
Common stock 175,820 175,820
Capital surplus 199,442 202,834 3,392
Retained earnings 1,811,348 1,960,466 149,118
Accumulated other comprehensive
income (loss) 109,492 63,809 (45,683)
Treasury stock, at cost (1,928) (2,983) (1,055)
Non-controlling interests 103,045 111,209 8,164
--------------------- --------------------- ---------
Total equity 2,397,219 2,511,155 113,936
--------------------- --------------------- ---------
Total liabilities and equity 4,305,580 4,356,211 50,631
========================================= ===================== ===================== =========
Bonds and borrowings 311,950 298,438 (13,512)
Accumulated other comprehensive
income (loss):
Exchange differences on translating
foreign operations 17,549 8,368 (9,181)
Financial assets measured at fair
value through other comprehensive
income 91,952 55,503 (36,449)
Net changes in the fair value of
cash flow hedges (9) (62) (53)
Consolidated Statements of Changes in Equity
FY '18 (Apr. 1, 2017 - Mar. 31, 2018)
(In millions of yen)
Mitsubishi Electric Corp. stockholders' Non-controlling Total
equity interests equity
Common Capital Retained Accumulated Treasury Total
stock surplus earnings other stock,
comprehensive at cost
income
(loss)
----------
Balance at
beginning
of period 175,820 198,745 1,593,660 101,166 (1,228) 2,068,163 98,800 2,166,963
================== ======== ======== ========== ============== ========= ========== ================ ==========
Comprehensive
income
Net profit 255,755 255,755 10,644 266,399
Other
comprehensive
income
(loss),
net of tax 38,955 38,955 1,276 40,231
-------- -------- ---------- -------------- --------- ---------- ---------------- ----------
Comprehensive
income 255,755 38,955 294,710 11,920 306,630
-------- -------- ---------- -------------- --------- ---------- ---------------- ----------
Transfer to
retained
earnings 30,629 (30,629)
Dividends (68,696) (68,696) (7,085) (75,781)
Purchase of
treasury
stock (700) (700) (700)
Disposal of
treasury
stock 0 0 0 0
Transactions with
non-controlling
interests and
other 697 697 (590) 107
-------- -------- ---------- -------------- --------- ---------- ---------------- ----------
Balance at end
of period 175,820 199,442 1,811,348 109,492 (1,928) 2,294,174 103,045 2,397,219
================== ======== ======== ========== ============== ========= ========== ================ ==========
FY '19 (Apr. 1, 2018 - Mar. 31, 2019)
(In millions of yen)
Mitsubishi Electric Corp. stockholders' Non-controlling Total
equity interests equity
Common Capital Retained Accumulated Treasury Total
stock surplus earnings other stock,
comprehensive at cost
income
(loss)
----------
Balance at
beginning
of period 175,820 199,442 1,811,348 109,492 (1,928) 2,294,174 103,045 2,397,219
================== ======== ======== ========== ============== ========= ========== ================ ==========
Comprehensive
income
Net profit 226,648 226,648 11,006 237,654
Other
comprehensive
income
(loss),
net of tax (37,342) (37,342) (141) (37,483)
-------- -------- ---------- -------------- --------- ---------- ---------------- ----------
Comprehensive
income 226,648 (37,342) 189,306 10,865 200,171
-------- -------- ---------- -------------- --------- ---------- ---------------- ----------
Transfer to
retained
earnings 8,341 (8,341)
Dividends (85,871) (85,871) (5,872) (91,743)
Purchase of
treasury
stock (1,055) (1,055) (1,055)
Disposal of
treasury
stock 0 0 0 0
Transactions with
non-controlling
interests and
other 3,392 3,392 3,171 6,563
-------- -------- ---------- -------------- --------- ---------- ---------------- ----------
Balance at end
of period 175,820 202,834 1,960,466 63,809 (2,983) 2,399,946 111,209 2,511,155
================== ======== ======== ========== ============== ========= ========== ================ ==========
Consolidated Statements of Cash Flows
(In millions of yen)
FY '18 FY '19 B - A
(Apr. 1, 2017 (Apr. 1,
- Mar. 31, 2018 - Mar.
2018) 31, 2019)
(A) (B)
--------------- --------------
I Cash flows from operating activities
1 Net profit 266,399 237,654 (28,745)
2 Adjustments to cash flows from
operating activities
(1) Depreciation, amortization
and other 181,474 178,892 (2,582)
(2) Decrease (increase) in trade
receivables and contract assets (32,348) (40,780) (8,432)
(3) Decrease (increase) in inventories (82,975) (82,718) 257
(4) Increase (decrease) in trade
payables (57,717) (20,792) 36,925
(5) Other, net (9,065) (32,439) (23,374)
---- --------------------------------------- --------------- -------------- ---------
Cash flows from operating activities 265,768 239,817 (25,951)
II Cash flows from investing activities
Purchase of property, plant and
1 equipment (186,792) (188,042) (1,250)
Proceeds from sale of property,
2 plant and equipment 3,005 4,170 1,165
Purchase of investment securities
3 (net of cash acquired) (8,518) (13,304) (4,786)
Proceeds from sale of investment
4 securities (net of cash disposed) 35,194 11,824 (23,370)
5 Other, net (24,904) (25,316) (412)
---- --------------------------------------- --------------- -------------- ---------
Cash flows from investing activities (182,015) (210,668) (28,653)
I +
II Free cash flow 83,753 29,149 (54,604)
III Cash flows from financing activities
Proceeds and repayment of bonds
1 and long-term borrowings (44,006) (22,892) 21,114
Increase (decrease) in short-term
2 borrowings, net (27,496) (2,077) 25,419
3 Dividends paid (68,696) (85,871) (17,175)
4 Purchase of treasury stock (700) (1,055) (355)
5 Disposal of treasury stock 0 0 0
6 Other, net (8,915) (172) 8,743
---- --------------------------------------- --------------- -------------- ---------
Cash flows from financing activities (149,813) (112,067) 37,746
Effect of exchange rate changes
IV on cash and cash equivalents 2,790 (2,057) (4,847)
---- --------------------------------------- --------------- -------------- ---------
Net increase (decrease) in cash
V and cash equivalents (63,270) (84,975) (21,705)
---- --------------------------------------- --------------- -------------- ---------
Cash and cash equivalents at
VI beginning of period 662,469 599,199 (63,270)
---- --------------------------------------- --------------- -------------- ---------
Cash and cash equivalents at
VII end of period 599,199 514,224 (84,975)
---- --------------------------------------- --------------- -------------- ---------
Consolidated Segment Information (Fiscal 2019)
1. Revenue and Operating Profit by Business Segment
(In millions of yen)
Business Segment FY '18 FY '19 C - A D - B C/A
(Apr. 1, 2017 (Apr. 1, 2018 (%)
- -
Mar. 31, 2018) Mar. 31, 2019)
----------------------
Revenue Operating Revenue Operating
(A) profit (C) profit
(B) (D)
---------- ---------- ----------
Energy and Electric
Systems 1,253,062 65,457 1,296,745 82,501 43,683 17,044 103
---------- ---------- ---------- ---------- --------- --------- -----
Industrial Automation
Systems 1,444,928 187,350 1,467,633 142,563 22,705 (44,787) 102
---------- ---------- ---------- ---------- --------- --------- -----
Information and
Communication Systems 438,184 11,340 426,269 12,247 (11,915) 907 97
---------- ---------- ---------- ---------- --------- --------- -----
Electronic Devices 202,294 14,164 199,908 1,442 (2,386) (12,722) 99
---------- ---------- ---------- ---------- --------- --------- -----
Home Appliances 1,049,369 55,496 1,074,044 59,451 24,675 3,955 102
---------- ---------- ---------- ---------- --------- --------- -----
Others 659,059 24,034 676,736 24,172 17,677 138 103
---------- ---------- ---------- ---------- --------- --------- -----
Subtotal 5,046,896 357,841 5,141,335 322,376 94,439 (35,465) 102
---------- ---------- ---------- ---------- --------- --------- -----
Eliminations and
other (602,472) (30,397) (621,414) (31,899) (18,942) (1,502)
---------- ---------- ---------- ---------- --------- --------- -----
Consolidated Total 4,444,424 327,444 4,519,921 290,477 75,497 (36,967) 102
---------- ---------- ---------- ---------- --------- --------- -----
*Notes: Inter-segment revenue are included in the above chart.
2. Revenue by Location of Customers
(In millions of yen)
Location of Customers FY '18 FY '19 B - A B/A (%)
(Apr. 1, 2017 (Apr. 1, 2018
- -
Mar. 31, 2018) Mar. 31, 2019)
----------------------- -----------------------
Revenue % of total Revenue % of total
(A) revenue (B) revenue
---------- ----------- ---------- -----------
Japan 2,438,942 54.9 2,556,644 56.6 117,702 105
------------------------- ---------- ----------- ---------- ----------- --------- --------
North America 419,121 9.4 429,451 9.5 10,330 102
---------- ----------- ---------- ----------- --------- --------
Asia (excluding
Japan) 1,089,176 24.5 1,013,883 22.4 (75,293) 93
---------- ----------- ---------- ----------- --------- --------
China 545,072 12.3 486,405 10.8 (58,667) 89
---------- ----------- ---------- ----------- --------- --------
Europe 431,316 9.7 453,748 10.0 22,432 105
------------------------ ---------- ----------- ---------- ----------- --------- --------
Others 65,869 1.5 66,195 1.5 326 100
------------------------ ---------- ----------- ---------- ----------- --------- --------
Total overseas
revenue 2,005,482 45.1 1,963,277 43.4 (42,205) 98
------------------------- ---------- ----------- ---------- ----------- --------- --------
Consolidated total 4,444,424 100.0 4,519,921 100.0 75,497 102
---------- ----------- ---------- ----------- --------- --------
Notes to the Consolidated Financial Statements
(Matters regarding the scope of consolidation and application of the equity method: changes against the previous fiscal year end)
Number of subsidiaries: 206 (Added: 5; Excluded: 4)
Number of equity method associates: 37 (Added: 1; Excluded: 0)
(Per share information)
FY '18 FY '19
(Apr. 1, 2017 - (Apr. 1, 2018 -
Mar. 31, 2018) Mar. 31, 2019)
Net profit attributable
to Mitsubishi Electric Corp. 255,755 million 226,648 million
stockholders yen yen
--------------------- ---------------------
Effect of potential ordinary
shares
--------------------- ---------------------
Diluted Net profit attributable
to Mitsubishi Electric Corp. 255,755 million 226,648 million
stockholders yen yen
-------------------------------- --------------------- ---------------------
Average ordinary shares
outstanding 2,145,808,679 shares 2,145,198,524 shares
--------------------- ---------------------
Cause of dilution
Stock options
--------------------- ---------------------
Adjusted ordinary shares
outstanding 2,145,808,679 shares 2,145,198,524 shares
-------------------------------- --------------------- ---------------------
Mitsubishi Electric Corp.
stockholders' equity per
share 1,069.(19) yen 1,118.(83) yen
--------------------- ---------------------
Basic earnings per share
attributable to Mitsubishi
Electric Corp. stockholders 119.(19) yen 105.(65) yen
--------------------- ---------------------
Diluted earnings per share
attributable to Mitsubishi
Electric Corp. stockholders 119.(19) yen 105.(65) yen
--------------------- ---------------------
(Notes regarding the going concern assumption)
Not applicable
(Significant subsequent events)
Not applicable
Condensed Quarterly Consolidated Financial Statements
Condensed Quarterly Consolidated Statements of Profit or Loss and Condensed Quarterly Consolidated Statements of Comprehensive Income (Fourth Quarter, Fiscal 2019)
(Condensed Quarterly Consolidated Statements of Profit or Loss)
(In millions of yen)
FY '18 FY '19
(Jan. 1, 2018 (Jan. 1, 2019
- -
Mar. 31, 2018) Mar. 31, 2019)
(A) % of (B) % of B - A B/A
total total (%)
---------- -------
Revenue 1,257,669 100.0 1,255,796 100.0 (1,873) 100
Cost of sales 883,096 70.2 886,620 70.6 3,524 100
Selling, general and
administrative expenses 279,166 22.2 280,241 22.3 1,075 100
Other profit (loss) (5,909) (0.5) 102 0.0 6,011 -
Operating profit 89,498 7.1 89,037 7.1 (461) 99
Financial income 1,364 0.1 1,287 0.1 (77) 94
Financial expenses 5,051 0.4 1,035 0.1 (4,016) 20
Share of profit of investments
accounted for using the
equity method 8,221 0.7 4,923 0.4 (3,298) 60
---------------------------------- ---------- ------- ---------- ------- -------- -----
Profit before income
taxes 94,032 7.5 94,212 7.5 180 100
Income taxes 20,242 1.6 23,950 1.9 3,708 118
---------- ------- ---------- ------- -------- -----
Net profit 73,790 5.9 70,262 5.6 (3,528) 95
---------- ------- ---------- ------- -------- -----
Net profit attributable
to:
Mitsubishi Electric Corp.
stockholders 71,685 5.7 67,829 5.4 (3,856) 95
Non-controlling interests 2,105 0.2 2,433 0.2 328 116
---------- ------- ---------- ------- -------- -----
(Condensed Quarterly Consolidated Statements of Comprehensive Income)
(In millions of yen)
FY '18 (A) FY '19 (B) B - A
(Jan. 1, 2018 (Jan. 1, 2019
- -
Mar. 31, 2018) Mar. 31, 2019)
---------------- ----------------
Net profit 73,790 70,262 (3,528)
---------------- ---------------- --------
(Other comprehensive income
(loss),
net of tax)
Items that will not be reclassified
to
net profit
Changes in fair value of financial
assets measured at fair value
through other comprehensive
income (23,397) 5,134 28,531
------------------------------------------ ---------------- ---------------- --------
Remeasurements of defined
benefit plans 21,323 12,234 (9,089)
------------------------------------------ ---------------- ---------------- --------
Share of other comprehensive
income of investments accounted
for using the equity method (659) (531) 128
---------------- ---------------- --------
Subtotal (2,733) 16,837 19,570
---------------- ---------------- --------
Items that may be reclassified
to net profit
Exchange differences on translating
foreign operations (28,989) 6,459 35,448
------------------------------------------ ---------------- ---------------- --------
Net changes in the fair value
of cash flow hedges (74) (1) 73
------------------------------------------ ---------------- ---------------- --------
Share of other comprehensive
income of investments accounted
for using the equity method 789 (994) (1,783)
---------------- ---------------- --------
Subtotal (28,274) 5,464 33,738
---------------- ---------------- --------
Total other comprehensive
income (loss) (31,007) 22,301 53,308
---------------- ---------------- --------
Comprehensive income 42,783 92,563 49,780
---------------- ---------------- --------
Comprehensive income attributable
to:
Mitsubishi Electric Corp.
stockholders 43,136 89,045 45,909
Non-controlling interests (353) 3,518 3,871
---------------- ---------------- --------
Disclosures of Transition to IFRS
The Mitsubishi Electric Group has applied IFRS beginning with the consolidated financial statements for the first quarter of the current fiscal year. The most recent consolidated financial statements prepared in accordance with U.S. GAAP are for the year ended March 31, 2018. The date of transition to IFRS was April 1, 2017.
(1) Exemptions and exceptions in IFRS 1
IFRS 1 requires entities adopting IFRS for the first time to retrospectively apply IFRS in principle; however, with regard to certain items, it allows exemption from, or prohibits, retrospective application of IFRS.
The company and its consolidated subsidiaries use the following exemptions on retrospective application permitted by IFRS 1:
- Business combinations
The company and its consolidated subsidiaries elected not to apply IFRS 3 Business Combinations retrospectively to past business combinations that occurred on or before December 22, 2015. Consequently, the amount of goodwill that arose from business combinations that occurred on or before December 22, 2015 is recorded at the carrying amount in accordance with U.S. GAAP. Goodwill was tested for impairment at the transition date irrespective of whether there was any indication of impairment.
- Exchange differences on translating foreign operations
The company and its consolidated subsidiaries elected to deem the cumulative translation differences for foreign operations at the transition date to be zero. Consequently, the cumulative translation differences for foreign operations at the transition date were reclassified from accumulated other comprehensive income (loss) to retained earnings.
- Designation of financial instruments recognized before the date of transition to IFRS
The company and its consolidated subsidiaries elected to designate the classification of financial instruments on the basis of the facts and circumstances that existed at the date of transition to IFRS.
(2) Reconciliations
Reconciliations for which disclosures are required on first time adoption of IFRS are as follows:
Items that do not affect retained earnings and comprehensive income are presented in "Reclassification," and items that affect retained earnings and comprehensive income are presented in "Recognition and measurement differences."
Reconciliation of Equity as at the Date of Transition to IFRS (April 1, 2017)
(Consolidated Statements of Financial Position) (In millions of yen)
Presentation under U.S. GAAP Re-classification Recognition IFRS Presentation under
U.S. GAAP and measurement IFRS
differences
(Assets) (Assets)
Current assets 2,500,685 3,062 4,810 2,508,557 Current assets
Cash and cash Cash and cash
equivalents 662,469 662,469 equivalents
Trade receivables
Trade receivables 1,037,201 15,261 103,004 1,155,466 and contract assets
Inventories 643,040 (83,138) 559,902 Inventories
Prepaid expenses
and other current
assets 157,975 (12,199) (15,056) 130,720 Other current assets
(3,062) 60,950 1,729,473 Non-current assets
Long-term trade
receivables 2,815 (2,815)
Investments 618,935 (618,935)
Investments accounted
for using the equity
181,724 5,634 187,358 method
Other financial
362,869 27,710 390,579 assets
Net property, plant Property, plant and
and equipment 732,611 (33,133) 699,478 equipment
Other non-current
Other assets 317,224 74,095 60,739 452,058 assets
---------- ----------------- ---------------- ---------- ---------------------------
Total assets 4,172,270 65,760 4,238,030 Total assets
============================ ========== ================= ================ ========== ===========================
(In millions of yen)
Presentation under U.S. GAAP Re-classification Recognition IFRS Presentation under
U.S. GAAP and measurement IFRS
differences
(Liabilities) (Liabilities)
Current liabilities 1,525,761 7,456 33,082 1,566,299 Current liabilities
Bank loans and current
portion of long-term
debt 124,368 21,987 146,355 Bonds and borrowings
Trade payables 780,202 (145,119) 635,083 Trade payables
Other current Other current
liabilities 621,191 152,575 11,095 784,861 liabilities
(7,456) 6,423 504,768 Non-current liabilities
Long-term debt 227,756 227,756 Bonds and borrowings
Retirement and severance Retirement benefit
benefits 194,990 8,044 203,034 liabilities
Other non-current
Other fixed liabilities 83,055 (7,456) (1,621) 73,978 liabilities
--------- ----------------- ---------------- --------- ----------------------------
Total liabilities 2,031,562 39,505 2,071,067 Total liabilities
--------- ----------------- ---------------- --------- ----------------------------
(Equity) (Equity)
Mitsubishi Electric Mitsubishi Electric
Corp. shareholders' Corp. stockholders'
equity 2,039,627 28,536 2,068,163 equity
Common stock 175,820 175,820 Common stock
Capital surplus 212,530 (13,785) 198,745 Capital surplus
Retained earnings 1,654,557 (60,897) 1,593,660 Retained earnings
Accumulated other Accumulated other
comprehensive income comprehensive income
(loss) (2,052) 103,218 101,166 (loss)
Treasury stock at Treasury stock, at
cost (1,228) (1,228) cost
Noncontrolling interests 101,081 (2,281) 98,800 Non-controlling interests
--------- ----------------- ---------------- --------- ----------------------------
Total equity 2,140,708 26,255 2,166,963 Total equity
--------- ----------------- ---------------- --------- ----------------------------
Total liabilities Total liabilities
and equity 4,172,270 65,760 4,238,030 and equity
============================= ========= ================= ================ ========= ============================
Balance of Debt 352,124 21,987 374,111 Bonds and borrowings
Accumulated other Accumulated other
comprehensive income comprehensive income
(loss): (loss):
Foreign currency Exchange differences
translation on translating foreign
adjustments 18,535 (18,535) operations
Pension liability Remeasurements of
adjustments (156,993) 156,993 defined benefit plans
Financial assets
measured
at fair value through
Unrealized gains on other comprehensive
securities 136,352 (35,223) 101,129 income
Net changes in the
Unrealized gains on fair value of cash
derivative instruments 54 (17) 37 flow hedges
Reconciliation of Equity as at the End of the Previous Fiscal Year (March 31, 2018)
(Consolidated Statements of Financial Position) (In millions of yen)
Presentation under U.S. GAAP Re-classification Recognition IFRS Presentation under
U.S. GAAP and measurement IFRS
differences
(Assets) (Assets)
Current assets 2,606,493 (1,434) (22,324) 2,582,735 Current assets
Cash and cash Cash and cash
equivalents 599,199 599,199 equivalents
Trade receivables
Trade receivables 1,087,593 14,225 89,711 1,191,529 and contract assets
Inventories 741,782 (95,520) 646,262 Inventories
Prepaid expenses
and other current
assets 177,919 (15,659) (16,515) 145,745 Other current assets
1,434 63,345 1,722,845 Non-current assets
Long-term trade
receivables 1,965 (1,965)
Investments 614,295 (614,295)
Investments accounted
for using the equity
187,828 6,480 194,308 method
Other financial
335,474 27,697 363,171 assets
Net property, plant Property, plant and
and equipment 740,448 (16,191) 724,257 equipment
Other non-current
Other assets 301,358 94,392 45,359 441,109 assets
---------- ----------------- ---------------- ---------- ---------------------------
Total assets 4,264,559 41,021 4,305,580 Total assets
============================ ========== ================= ================ ========== ===========================
(In millions of yen)
Presentation under U.S. GAAP Re-classification Recognition IFRS Presentation under
U.S. GAAP and measurement IFRS
differences
(Liabilities) (Liabilities)
Current liabilities 1,471,367 8,586 8,296 1,488,249 Current liabilities
Bank loans and current
portion of long-term
debt 122,430 465 122,895 Bonds and borrowings
Trade payables 719,404 (139,838) 579,566 Trade payables
Other current Other current
liabilities 629,533 148,424 7,831 785,788 liabilities
(8,586) (349) 420,112 Non-current liabilities
Long-term debt 189,055 189,055 Bonds and borrowings
Retirement and severance Retirement benefit
benefits 171,017 503 171,520 liabilities
Other non-current
Other fixed liabilities 68,975 (8,586) (852) 59,537 liabilities
--------- ----------------- ---------------- --------- ----------------------------
Total liabilities 1,900,414 7,947 1,908,361 Total liabilities
--------- ----------------- ---------------- --------- ----------------------------
(Equity) (Equity)
Mitsubishi Electric Mitsubishi Electric
Corp. shareholders' Corp. stockholders'
equity 2,259,355 34,819 2,294,174 equity
Common stock 175,820 175,820 Common stock
Capital surplus 213,250 (13,808) 199,442 Capital surplus
Retained earnings 1,857,741 (46,393) 1,811,348 Retained earnings
Accumulated other Accumulated other
comprehensive income comprehensive income
(loss) 14,472 95,020 109,492 (loss)
Treasury stock at Treasury stock, at
cost (1,928) (1,928) cost
Noncontrolling interests 104,790 (1,745) 103,045 Non-controlling interests
--------- ----------------- ---------------- --------- ----------------------------
Total equity 2,364,145 33,074 2,397,219 Total equity
--------- ----------------- ---------------- --------- ----------------------------
Total liabilities Total liabilities
and equity 4,264,559 41,021 4,305,580 and equity
============================= ========= ================= ================ ========= ============================
Balance of Debt 311,485 465 311,950 Bonds and borrowings
Accumulated other Accumulated other
comprehensive income comprehensive income
(loss): (loss):
Foreign currency Exchange differences
translation on translating foreign
adjustments 34,149 (16,600) 17,549 operations
Pension liability Remeasurements of
adjustments (141,075) 141,075 defined benefit plans
Financial assets
measured
at fair value through
Unrealized gains on other comprehensive
securities 121,413 (29,461) 91,952 income
Unrealized gains (losses) Net changes in the
on derivative fair value of cash
instruments (15) 6 (9) flow hedges
Notes to reconciliation of equity
The principal effects of transition to IFRS in the reconciliation of equity above are as follows:
(1) Reclassification
The main elements of reclassification are as follows:
(a) In accordance with the presentation provisions under IFRS, other financial assets are presented separately.
(b) Part of trade receivables, prepaid expenses and other current assets and other assets are reclassified based on the definition and recognition criteria of IFRS.
(c) Part of trade payables, other current liabilities and other fixed liabilities are reclassified based on the definition and recognition criteria of IFRS.
(2) Recognition and measurement differences
The main elements of recognition and measurement differences are as follows:
(a) Employee benefits
Under U.S. GAAP, actuarial gains and losses and past service costs are deferred in accumulated other comprehensive income (loss), subsequently amortized for a specified future period and recognized in profit or loss. Current service costs, interest costs and expected return on plan assets are recognized in profit or loss for the consolidated fiscal year.
Under IFRS, defined benefit obligations and plan assets relating to defined benefit corporate pension plans and lump-sum payment plans are remeasured in accordance with IFRS requirements. Changes resulting from remeasurement are recognized in accumulated other comprehensive income (loss), and reclassified directly from accumulated other comprehensive income (loss) to retained earnings, not through profit or loss. Past service costs arising from plan amendments are fully recognized immediately in profit or loss. Current service costs are recognized in profit or loss. Interest costs are recognized in profit or loss at the amount determined by multiplying the net amount of the defined benefit obligation and plan assets by the discount rate used to determine the present value of the obligation.
(b) Equity instruments
Under U.S. GAAP, non-marketable equity instruments are recognized at their cost. If fair value of financial assets has decreased and the decrease is considered not to be temporary, impairment loss is recognized for the amount of the cost of the financial assets in excess of fair value. Gains or losses on the sale of these financial assets are recognized in profit or loss.
Under IFRS, all equity instruments are recognized at fair value irrespective of whether there is an active market. Since it is permitted to recognize changes in fair value in other comprehensive income (loss), the company and its consolidated subsidiaries have elected to recognize changes in fair value of equity instruments in other comprehensive income (loss). Accordingly, impairment losses and gains or losses on the sale of equity instruments recognized in profit or loss under U.S. GAAP are recognized in other comprehensive income as well.
(c) Income taxes
Under U.S. GAAP, tax expenses incurred by sellers are deferred using the deferred method for differences arising from unrealized profits and losses from intercompany transactions.
Under IFRS, a difference between the carrying amount and the sale price of an asset sold is recognized as a future deductible temporary difference based on the asset and liability method. A deferred tax asset is recognized for the future deductible temporary difference using purchaser's effective tax rate while taking its recoverability into consideration.
Under U.S. GAAP, deferred tax liabilities for temporary differences associated with investments in equity method investees are recognized using tax rates applicable on the premise that the temporary difference will be reversed at the time of sale of the equity method investees even if a company intends to continue to hold the investments. In principle, deferred tax liabilities are recognized for the undistributed earnings of subsidiaries.
Under IFRS, deferred tax liabilities are in principle recognized for all the taxable temporary differences using tax rates applied when the taxable temporary differences reverse, such as when receiving dividends or selling the investments. Deferred tax liabilities are recognized for the taxable temporary differences associated with investments in subsidiaries etc. which are probable to reverse in the foreseeable future.
(d) Exchange differences on translating foreign operations
Cumulative exchange differences on translating foreign operations are all deemed to be zero at the date of transition to IFRS. Consequently, exchange differences on translating foreign operations included in accumulated other comprehensive income as at the transition date were fully reclassified to retained earnings.
(e) Exclusion of equity method investees
Under U.S. GAAP, when an investee no longer qualifies as an equity method investee, the difference between the sale price and the carrying amount of the interest sold is recognized in profit or loss. If an investor retains a residual interest, gains or losses recognized in prior periods remain included in the carrying amount of the residual interest.
Under IFRS, when an investee no longer qualifies as an equity method investee, any residual interest is measured at fair value. The difference between the sum of the sales price and the fair value of the residual interest and the carrying amount of the interest at the point when an investee no longer qualifies as an equity method investee is recognized in profit or loss.
(f) Government grants
Under U.S. GAAP, government grants related to acquisition of assets are not reflected in the carrying amounts of assets because there are no accounting standards for such government grants.
Under IFRS, government grants related to assets are recognized as deducting the carrying amount of the asset by the government grants received.
(g) Impairment of non-financial assets
Under U.S. GAAP, if there is an indication that a non-current asset may be impaired, the carrying amount and the undiscounted estimated future cash flows of the asset is compared. If the carrying amount exceeds the estimated future cash flows, any excess of the carrying amount over the fair value is recognized as an impairment loss.
Under IFRS, if there is an indication that a non-current asset may be impaired, any excess of the carrying amount over the recoverable amount of the non-current asset (the higher of value in use or fair value less costs of disposal) is recognized as an impairment loss of the non-current asset.
(h) Business combinations
Under U.S. GAAP, in business combinations, the acquirer measures the acquiree as a whole (including non-controlling interests) at fair value and goodwill is recognized including the portion of goodwill attributable to the non-controlling interests.
Under IFRS, in business combinations, it is permitted to elect to apply either of two methods: the acquirer measures the acquiree as a whole (including non-controlling interests) at fair value and goodwill is recognized including the portion of goodwill attributable to the non-controlling interests; or non-controlling interests are measured as a proportional interest in the fair value of the acquiree's net identifiable assets and goodwill is recognized only for the acquirer's share. The company elected the method of measuring non-controlling interest as a proportional interest in the fair value of the acquiree's net identifiable assets and recognizing goodwill only for the acquirer's share. Capital surplus is recognized when non-controlling interests are additionally acquired after the date when control was obtained.
Reconciliation of Profit or Loss and Comprehensive Income for the Previous Fiscal Year (from April 1, 2017 to March 31, 2018)
(Consolidated Statements of Profit or Loss) (In millions of yen)
Presentation under U.S. GAAP Re-classification Recognition IFRS Presentation under
U.S. GAAP and measurement IFRS
differences
Net sales 4,431,198 13,226 4,444,424 Revenue
Cost of sales 3,030,902 59,547 3,090,449 Cost of sales
Selling, general
and administrative Selling, general and
expenses 1,061,778 729 (41,146) 1,021,361 administrative expenses
Loss on impairment
of
long-lived assets 19,881 (19,881)
(20,990) 15,820 (5,170) Other profit (loss)
---------- ----------------- ---------------- ---------- ---------------------------
Operating income 318,637 (1,838) 10,645 327,444 Operating profit
Other income 60,414
Interest and Dividends 8,611 23,637 (23,637) 8,611 Financial income
Equity in earnings
of affiliated
companies 22,261 (22,261)
Other 29,542 (29,542)
Other expenses 14,473
Interest 2,727 4,726 (657) 6,796 Financial expenses
Other 11,746 (11,746)
Share of profit of
investments accounted
for using the equity
22,261 1,686 23,947 method
---------- ----------------- ---------------- ---------- ---------------------------
Income before income Profit before income
taxes 364,578 (723) (10,649) 353,206 taxes
Income taxes 82,239 (723) 5,291 86,807 Income taxes
---------- ----------------- ---------------- ---------- ---------------------------
Net income 282,339 (15,940) 266,399 Net profit
---------- ----------------- ---------------- ---------- ---------------------------
Net profit attributable
to:
Net income attributable
to the noncontrolling Non-controlling
interests 10,459 185 10,644 interests
---------- ----------------- ----------------
Net income attributable
to Mitsubishi Electric Mitsubishi Electric
Corp. 271,880 (16,125) 255,755 Corp. stockholders
---------- ----------------- ---------------- ---------- ---------------------------
(Consolidated Statements of Comprehensive Income) (In millions of yen)
Presentation under U.S. GAAP Re-classification Recognition IFRS Presentation under
U.S. GAAP and measurement IFRS
differences
Net income 282,339 (15,940) 266,399 Net profit
---------- ----------------- ---------------- -------- ----------------------------
Other comprehensive (Other comprehensive
income (loss), net income (loss), net
of tax of tax)
Items that will not
be reclassified to
net profit
Changes in fair value
of financial assets
measured at fair value
through other
Unrealized gains comprehensive
(losses) on securities (14,875) 392 14,431 (52) income
Pension liability Remeasurements of
adjustments 15,857 (596) 6,062 21,323 defined benefit plans
Share of other
comprehensive
income of investments
accounted for using
204 (34) 170 the equity method
----------------- ---------------- -------- ----------------------------
20,459 21,441 Subtotal
----------------- ---------------- -------- ----------------------------
Items that may be
reclassified to net
profit
Exchange differences
Foreign currency on translating foreign
translation adjustments 17,023 (1,908) 1,877 16,992 operations
Unrealized gains Net changes in the
(losses) on derivative fair value of cash
instruments (88) (6) 23 (71) flow hedges
Share of other
comprehensive
income of investments
accounted for using
1,914 (45) 1,869 the equity method
----------------- ---------------- -------- ----------------------------
1,855 18,790 Subtotal
---------- ----------------- ---------------- -------- ----------------------------
Total other comprehensive
Total 17,917 22,314 40,231 income
---------- ----------------- ---------------- -------- ----------------------------
Comprehensive income 300,256 6,374 306,630 Comprehensive income
---------- ----------------- ---------------- -------- ----------------------------
Comprehensive income
attributable to:
Comprehensive income
attributable to
the noncontrolling Non-controlling
interests 11,852 68 11,920 interests
---------- ----------------- ----------------
Comprehensive income
attributable to
Mitsubishi Electric Mitsubishi Electric
Corp. 288,404 6,306 294,710 Corp. stockholders
---------- ----------------- ---------------- -------- ----------------------------
Notes to Reconciliation of Profit or Loss and Comprehensive Income
The principal effects of transition to IFRS in the reconciliation of profit or loss and comprehensive income above are as follows:
(1) Reclassification
The main elements of reclassification are as follows:
(a) In accordance with the presentation provisions under IFRS, financial income and financial expenses are presented separately.
(b) In accordance with the presentation provisions under IFRS, part of other income and other expenses, etc. is included and presented in operating profit.
(c) Unrealized gains (losses) on securities, pension liability adjustments, foreign currency translation adjustments and unrealized gains (losses) on derivative instruments in other comprehensive income that are attributable to equity investees are reclassified in accordance with the presentation provisions under IFRS.
(2) Recognition and measurement differences
The main elements of recognition and measurement differences are as follows:
(a) Reconciliation of revenue and cost of sales
Under U.S. GAAP, if progress of construction contracts cannot be reliably estimated, all construction costs and construction revenue are recognized when the construction is complete.
Under IFRS, revenue from a performance obligation satisfied over time is only recognized for costs incurred to the extent that it is probable that the cost will be recovered and costs are recognized as expenses in the period in which they are incurred if the progress cannot be reliably estimated.
(b) Equity instruments
Non-marketable equity instruments are recognized at their cost under U.S. GAAP. If fair value of financial assets has decreased and the decrease is considered not to be temporary, impairment loss is recognized for the amount of the cost of the financial assets in excess of fair value. Gains or losses on the sale of these financial assets are recognized in profit or loss.
Under IFRS, on the other hand, equity instruments are recognized at fair value irrespective of whether there is an active market. Because it is permitted to recognize changes in fair value in other comprehensive income, the company and its consolidated subsidiaries have elected to recognize changes in fair value of equity instruments in other comprehensive income. Accordingly, impairment losses and gains or losses on the sale of equity instruments recognized in profit or loss under U.S. GAAP are recognized in other comprehensive income as well.
Notes to Reconciliation of Cash Flows
There are no significant differences in the statement of cash flows resulting from transition from U.S. GAAP to IFRS.
Cautionary Statement
The Mitsubishi Electric Group (hereafter "the Group") is involved in development, manufacture and sales in a wide range of fields including Energy and Electric Systems, Industrial Automation Systems, Information and Communication Systems, Electronic Devices and Home Appliances, and these operations extend globally, not only inside Japan, but also in North America, Europe, Asia and other regions. While the statements herein are based on certain assumptions and premises that the Group trusts and considers to be reasonable under the circumstances on the date of announcement, actual financial standings and operating results are subject to change due to any of the factors as contemplated hereunder and/or any additional factor unforeseeable as of the date of this announcement. Such factors materially affecting the expectations expressed herein shall include but are not limited to the following:
(1) Important trends
The Group's operations may be affected by trends in the global economy, social conditions, laws, tax codes and regulations.
(2) Foreign currency exchange rates
Fluctuations in foreign currency markets may affect the Group's sales of exported products and purchases of imported materials that are denominated in U.S. dollars or euros, as well as its Asian production bases' sales of exported products and purchases of imported materials that are denominated in foreign currencies.
(3) Stock markets
A fall in stock market prices may cause a decline in value of the Group's marketable securities and pension assets.
(4) Supply/demand balance for products and procurement conditions for materials and components
A decline in prices and shipments due to changes in the supply/demand balance, as well as an increase in material prices due to a worsening of material and component procurement conditions, may adversely affect the Group's performance.
(5) Fund raising
An increase in interest rates, the yen interest rate in particular, would increase the Group's interest expenses.
(6) Significant patent matters
Important patent filings, licensing, copyrights and patent-related disputes may adversely affect related businesses.
(7) Environmental legislation or relevant issues
The Group may incur losses or expenses owing to changes in environmental legislation or the occurrence of environmental issues. Such changes in legislation or the occurrence of environmental issues may also impact manufacturing and all corporate activities of the Group.
(8) Flaws or defects in products or services
The Group may incur losses or expenses resulting out of flaws or defects in products or services, and the lowered reputation of the quality of all its products and services may affect the entire Group.
(9) Litigation and other legal proceedings
The Group's operations may be affected by lawsuits or other legal proceedings against Mitsubishi Electric, its subsidiaries and/or equity method associates.
(10) Disruptive changes
Disruptive changes in technology, development of products using new technology, timing of production and market introduction may adversely affect the Group's performance.
(11) Business restructuring
The Group may record losses due to restructuring measures.
(12) Information security
The performance of the Group may be affected by computer virus infections, unauthorized access and other unpredictable incidents that lead to the loss or leakage of personal information held by the Group or confidential information regarding the Group's business such as its technology, sales and other operations.
(13) Natural disasters
The Group's operations, particularly manufacturing activities, may be affected by the occurrence of earthquakes, typhoons, tsunami, fires and other large-scale disasters.
(14) Other significant factors
The Group's operations may be affected by the outbreak of social or political upheaval due to terrorism, war, pandemic by new strains of influenza and other diseases, or other factors.
http://www.rns-pdf.londonstockexchange.com/rns/2117X_1-2019-4-26.pdf
###
About Mitsubishi Electric Corporation
With nearly 100 years of experience in providing reliable, high-quality products, Mitsubishi Electric Corporation (TOKYO: 6503) is a recognized world leader in the manufacture, marketing and sales of electrical and electronic equipment used in information processing and communications, space development and satellite communications, consumer electronics, industrial technology, energy, transportation and building equipment. Embracing the spirit of its corporate statement, Changes for the Better, and its environmental statement, Eco Changes, Mitsubishi Electric endeavors to be a global, leading green company, enriching society with technology. The company recorded a revenue of 4,519.9 billion yen (US$ 40.7 billion*) in the fiscal year ended March 31, 2019. For more information visit:
www.MitsubishiElectric.com
*At an exchange rate of 111 yen to the US dollar, the rate given by the Tokyo Foreign Exchange Market on March 31, 2019
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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