JVCKENWOOD (6632) investor relations material

Executive summary

• Q1 revenue increased 10.7% year-over-year to 88.8 billion yen, driven by strong sales in Domestic Dealer-Installed Option (M&T) and Entertainment (ES) businesses, as well as yen depreciation.

• Core operating income declined 34.2% year-over-year to 2.0 billion yen due to higher memory prices, lingering effects of the U.S. government shutdown on S&S, and increased fixed costs.

• Operating profit dropped 65.0% to 1.5 billion yen, reflecting restructuring expenses and the absence of prior-year asset sale gains.

• Profit attributable to owners of the parent dropped by 2.5 billion yen year-over-year and declined 71.3% to 989 million yen, mainly from lower operating profit and higher finance expenses.

Financial highlights

• Q1 revenue: 88.8 billion yen (+10.7% YoY); core operating income: 2.0 billion yen (-34.2% YoY).

• Operating profit: 1.5 billion yen (-65.0% YoY); EBITDA: 7.4 billion yen (-21.7% YoY).

• Gross profit margin improved to 32.3% from 30.6% YoY; gross profit was 24,953 million yen, up from 24,536 million yen YoY.

• Net cash position improved to 2.5 billion yen, up 5.4 billion yen from previous year-end; cash and cash equivalents at quarter-end were 69,203 million yen, up 19,900 million yen YoY.

• Basic earnings per share was 7.00 yen, compared to 23.38 yen a year earlier.

Outlook and guidance

• Full-year revenue forecast remains at 364.0 billion yen (+2.0% YoY); core operating income forecast at 23.4 billion yen (+12.1% YoY).

• Profit attributable to owners is forecast at 15.0 billion yen (-10.6% YoY), with basic EPS of 106.13 yen.

• No change in guidance despite Q1 core operating income shortfall; expects sales recovery in S&S and continued strong performance in M&T and ES.

• Price revisions to continue in response to rising memory and component costs.