DENSO Announces Third-quarter Financial Results

Worldwide decline in car production and currency exchange loss results in drop in net sales and operating income

KARIYA, Japan, February 3, 2009: DENSO Corporation today announced global financial results for the first to third quarters for the nine months ended December 31, 2008:

-- Consolidated net sales totaled 2,630.3 billion yen (US$28.9 billion), an 11.6 percent decrease from the previous year.

-- Consolidated operating income totaled 85.2 billion yen (US$935.4 million), a 68.8 percent decrease from the previous year.

-- Consolidated net income totaled 37.1 billion yen (US$407.5 million), an 80.7 percent decrease from the previous year.

"Sales and operating income decreased mainly due to the worldwide decline in car production and substantial currency exchange loss," said Sadahiro Usui, managing officer of DENSO Corporation.

In Japan, sales totaled 1,815.9 billion yen (US$19.9 billion), a 10.2 percent decrease from the previous year. In addition to a sales decrease resulting from the slowdown in domestic car production and product exports mainly to North America and Europe, substantial currency exchange loss and rising raw materials costs led to operating income of 2.9 billion yen (US$31.5 million), a 98.2 percent decrease from the previous year.

In North, Central and South America, a decrease in sales mainly to Toyota and the three major American automakers, resulting from a drop in car production, led to a decrease in sales to 476.6 billion yen (US$5.2 billion), a 24.1 percent decrease from the previous year. Despite cost-reduction efforts, the lower production volumes led to operating income of 12.9 billion yen (US$141.4 million), a 60.4 percent decrease from the previous year.

In Europe, sales totaled 380.1 billion yen (US$4.2 billion), a 16.5 percent decrease from the previous year, mainly due to lower car production for Japanese auto manufacturers. Despite cost-reduction efforts, the decrease in production volume resulted in operating income of 7.7 billion yen (US$84.1 million), a 55.5 percent decrease from the previous year.

In Asia and Oceania, sales totaled 422.4 billion yen (US$4.6 billion), a 7.5 percent decrease from the previous year, and operating income totaled 57.0 billion yen (US$625.8 million), a 9.3 percent decrease from the previous year. In spite of an increase in car production volumes for Japanese auto manufacturers in ASEAN countries and China, substantial currency exchange loss resulted in decreases in both sales and operating income.

"Considering the severe business environment, along with the additional decrease in car production from January 2009, we have revised our full-year forecasts for the fiscal year ending March 31, 2009," said Usui.