Slide 1: Results for Fiscal Year Ended March 31, 2021
Results for Fiscal Year Ended March 31, 2021 May 28, 2021 DKK Co., Ltd.
Slide 2: Table of contents
Table of contents 1. Result Highlights 2. Segment Results (Nonconsolidated) 3. Forecasts for Current Fiscal Year 4. Business Situations and Outlook 5. ESG Initiatives 1
Slide 3: 1. Result Highlights
1. RESULT HIGHLIGHTS = A DdKK Co. Lt
Slide 4: Consolidated Net Sales
Consolidated Net Sales Consolidated net sales fell about 8% year-on-year. Net sales for Telecommunication Business rose about 0.9 billion yen, driven mainly by the brisk performance of the Fixed Wireless segment. Net sales fell about 4.4 billion yen for Radio Frequency Business due to COVID-19
Slide 5: Consolidated Operating Income
Consolidated Operating Income Consolidated operating income dropped about 40% year-on-year mainly due to a fall in net sales of the Radio Frequency Business. In addition to decreased net sales, the drop was driven also by an increase in research and development expenses for the purpose of prepar
Slide 6: Segment Income (Consolidated)
Segment Income (Consolidated) Profit of the Telecommunication Business rose about 10%, driven mainly by higher net sales of Fixed Wireless segment. Profit fell about 49% in the Radio Frequency Business due to COVID-19-related impacts, although there were some signs of recovery in demand for cont
Slide 7: Overview of FY3/21 Consolidated Results
Overview of FY3/21 Consolidated Results Ordinary income fell 0.97 billion yen year-on-year as operating income decreased. Net income decreased 0.63 billion yen year-on-year. ■ Full-year statement income [consolidated] (Millions of yen) Difference from FY3/21 YoY change FY3/20 initial forecast re
Slide 8: 2. Segment Results (Nonconsolidated)
2. SEGMENT RESULTS (NONCONSOLIDATED) 7
Slide 9: Mobile Communications: Net Sales (Nonconsolidated)
Mobile Communications: Net Sales (Nonconsolidated) Net sales fell about 0.7 billion yen year-on-year mainly due to delays in mobile carriers’ base-station construction caused by the COVID-19 pandemic. In the current fiscal year, we anticipate a net sales increase of about 1.1 billion yen as we e
Slide 10: Fixed Wireless: Net Sales (Nonconsolidated)
Fixed Wireless: Net Sales (Nonconsolidated) Net sales increased 2.6 billion yen year-on-year mainly as demand related to administrative radio systems for disaster prevention use remained at high levels because of the moves to enhance disaster- prevention structures and digitalization. For the cu
Slide 11: Broadcasting: Net Sales (Nonconsolidated)
Broadcasting: Net Sales (Nonconsolidated) Net sales largely remained flat from the year-earlier level, despite a decrease in capital expenditure demand from broadcasters, as we successfully captured demand from moves to update digital broadcasting equipment. For the current fiscal year, we expec
Slide 12: Other: Net Sales (Nonconsolidated)
Other: Net Sales (Nonconsolidated) Net sales declined about 0.8 billion yen year-on-year to about 1.0 billion yen as number of large deals decreased in FY3/20. For the current fiscal year, we expect net sales to remain largely flat as we actively work to capture fresh demand. (100 million yen) O
Slide 13: Radio Frequency: Net Sales (Nonconsolidated)
Radio Frequency: Net Sales (Nonconsolidated) Net sales fell about 36% year-on-year to 4.6 billion yen as demand from the automotive industry dropped significantly due to the impact of the COVID-19 pandemic. For the current fiscal year, we expect net sales to increase about 0.5 billion yen as we
Slide 14: 3. Forecasts for Current Fiscal Year
3. FORECASTS FOR CURRENT FISCAL YEAR 13 13
Slide 15: Consolidated Net Sales and Operating Income Forecasts
Consolidated Net Sales and Operating Income Forecasts We anticipate consolidated net sales to increase 0.5 billion yen as we expect net sales of the fixed wireless communication-related segment to decline, despite a trend of recovery from the COVID-19 impact. We expect operating income to stay f
Slide 16: Segment Forecasts (Consolidated)
Segment Forecasts (Consolidated) We estimate net sales will drop 2.5% in the Telecommunication segment and rise about 20% in the Radio Frequency segment. Profit is estimated to decrease about 6% in the Telecommunication Business but increase about 15% in the Radio Frequency Business. (100 millio
Slide 17: Overview of Consolidated FY22/3 Forecasts
Overview of Consolidated FY22/3 Forecasts Ordinary income is expected to increase slightly just as the operating income is expected to increase. Similarly, net income is expected to increase about 4% year-on-year. (Millions of yen) FY3/21 FY22/3 YoY change results forecasts Amount Percentage Net
Slide 18: Shareholder Return
Shareholder Return Consolidated net income came to 1.15 billion yen in FY3/21. We plan a year-end payout of 45 yen per share, as we initially expected. We plan to buy treasury stock worth about 0.3 billion yen as a measure for shareholder return and improvement of capital efficiency. We plan t
Slide 19: 4. Business Situations and Outlook
4. BUSINESS SITUATIONS AND OUTLOOK 18 18
Slide 20: Situation of Mobile Communications Business in FY3/21
Mobile Situation of Mobile Communications Business in FY3/21 Communications Net sales of Mobile Communications business came to 13.1 billion yen, falling short of the target by 0.5 billion yen in FY3/21 Note: Figures are for the segment [non-consolidated]. (Millions of yen) Difference from initial 3
Slide 21: Outlook for 5G Investment in FY3/22 - (i)
Mobile Outlook for 5G Investment in FY3/22 - (i) Communications We expect mobile carriers to boost investment in FY3/22, including the number of antennas installed. * *Source: Created by DKK based on publicly 5G base station investment by NTT DOCOMO, KDDI, and SoftBank in FY3/22* available informati
Slide 22: Outlook for 5G Investment in FY3/22 - (ii)
Mobile Outlook for 5G Investment in FY3/22 - (ii) Communications While the number of antennas will increase, we expect antennas supporting only sub-6 radio frequency bands will lead the demand. As the trend for antennas changed with the shift to 5G capital expenditure, we expect antenna demand in
Slide 23: Outlook for 5G spending
Mobile Outlook for 5G spending Communications We at this point expect 5G spending to peak from FY3/23 to FY3/24. Services expected to be realized by 5G High speed, large capacity Highly reliable, ultralow Vast numbers of devices communication latency communication simultaneously accessing the networ
Slide 24: Efforts to Expand Mobile Communications Business
Mobile Efforts to Expand Mobile Communications Business Communications Selected as NTT DOCOMO’s 5G wireless equipment Example of base station configuration supporting 5G Developed wireless equipment compliant with the O-RAN fronthaul specifications, taking advantage of the know-how Antenna acquired
Slide 25: Situation of Fixed Wireless Business in FY3/21
Situation of Fixed Wireless Business in FY3/21 Fixed Wireless Net sales in the Fixed Wireless business increased 31.4% year-on-year to 11.0 billion yen in FY3/21. Note: Figures are for the segment [non-consolidated]. (Millions of yen) FY3/20 FY3/21 YoY change Difference from initial forecast results
Slide 26: Medium-Term Outlook for Fixed Wireless Business
Medium-Term Outlook for Fixed Wireless Business Fixed Wireless We expect demand to remain elevated, as the deadline for the “emergency disaster prevention and mitigation program bonds” was extended. Demands expected owing to the extension of “emergency disaster prevention and mitigation program bond
Slide 27: Situation and Outlook of Broadcasting Business in FY3/21
Situation and Outlook of Broadcasting Business in FY3/21 Broadcasting Demand peaked in the Broadcasting business during the period of increased terrestrial digital broadcasting investment and expected to remain flat going forward. Note: Figures are for the segment [non-consolidated]. (Millions of ye
Slide 28: Efforts in Broadcasting Business
Efforts in Broadcasting Business Broadcasting Broadcasting is an important infrastructure. We aim to focus effort in the business to fulfill our responsibility in society. Having been involved in the broadcasting segment for over seven decades since its foundation, DKK has the level of technology
Slide 29: Situation of Radio Frequency Business in FY3/21
Radio Situation of Radio Frequency Business in FY3/21 Frequency Demand for capital expenditure has decreased significantly in the automotive industry. Note: Figures are for the segment [non-consolidated]. (Millions of yen) FY3/20 FY3/21 YoY change Difference from initial forecast Initial results res
Slide 30: Outlook for Radio Frequency Business in FY3/22
Radio Outlook for Radio Frequency Business in FY3/22 Frequency We expect capital expenditure demand will gradually return as automobile production recovers. Forecasts for trends of demand in Radio Frequency business in FY3/22 Induction heating equipment Contract heat treating service Capital expendi
Slide 31: Axle Tube Quenching and Tempering Equipment
Radio Axle Tube Quenching and Tempering Equipment Frequency For the first time, we will manufacture and deliver quenching and tempering equipment for drivetrain components used in construction machineries. Delivery of axle tube quenching and tempering equipment • This equipment performs quenching an
Slide 32: Situation of Local 5G in FY3/21
Local 5G Situation of Local 5G in FY3/21 We gained know-how by becoming involved in overall system through a demonstration experiment. We achieved a major success in Japan’s first test of local 5G in maritime Ehime Research Institute Local 5G of Agriculture, Forestry and Demonstration experiment ove
Slide 33: Ministry of Internal Affairs and Communications' demonstration project in FY3/22
Ministry of Internal Affairs and Communications’ demonstration Local 5G project in FY3/22 Specific theme for technical demonstration is developed and usage model for resolving issues become the nucleus. Demonstration project of the Ministry of Internal Affairs and Communications In this fiscal year,
Slide 34: DKK's policy
DKK’s policy Local 5G We will promote proposition sales to various local governments and companies, including the Ministry of Internal Affairs and Communications, positioning FY3/22 as a demonstration phase. Content of FY3/22 demonstration project and DKK’s measures Technical demonstration: Assessme
Slide 35: Local 5G Area Construction
Local 5G Area Construction Local 5G A millimeter wave tends to travel in straight lines. Therefore, obstacles such as trees and buildings often create areas where waves cannot reach. DKK’s metamaterial reflectors How reflectors are used [DKK’s idea for solution] Develop a metamaterial reflector that
Slide 36: 28GHz Band Wireless Device with Integrated Antenna
Local 5G 28GHz Band Wireless Device with Integrated Antenna We began selling a 28GHz band wireless device with integrated antenna that supports local 5G. Advantages of device - Integrated antenna • The lineup of built-in antennas offers several antennas varying in directivity. - Support for O-RAN in
Slide 37: Reinforcing Research and Development
Reinforcing Research and Development R&D We began stepping up R&D efforts in FY3/21, putting effort into creating new businesses and strengthening existing businesses. Reinforcing Research and Development Creation of new businesses where DKK’s (in 100 million yen) strengths can be put to great use 2
Slide 38: Development of Maritime Marker Light
Development of Maritime Marker Light Topics We developed a maritime market light and are actively pushing it. • The offshore wind power market came up on our radar as an additional target for promoting sales of our LED aviation obstacle lights. • After the enactment of the Act on Promoting Utilizati
Slide 39: 5. ESG Initiatives
5. ESG INITIATIVES = A DdKK Co. Lt
Slide 40: Basic Efforts - (i)
Basic Efforts - (i) ESG DKK conducts analysis, identification, and consideration of ESG issues and aims to improve its corporate value through dialog with stakeholders by maintaining transparency. Social issues surrounding DKK [Environmental impacts] [Greater awareness of [Serious shortage of labor]
Slide 41: Basic Efforts - (ii)
Basic Efforts - (ii) ESG DKK strives to support and help strengthen sustainability of the Earth’s environment and local communities through its business activity. It also aims to help improve working environment and sustainability of itself. DKK’s ideas for solving ESG issues AFFORDABLE AND CLEAN EN
Slide 42: Efforts for E (environment) - (i)
Efforts for E (environment) - (i) ESG DKK contributes to making our environment sustainable through development and sales of products that have small environmental impacts and activities which improve processes of distribution that have large environmental impacts. DKK’s activities that contribute t
Slide 43: Efforts for E (environment) - (ii)
Efforts for E (environment) - (ii) ESG DKK’s activities that contribute to conserving the environment Radio Frequency Business CLIMATE ACTION We encouraged customers to replace vacuum-tube high-frequency generators we delivered with transistor inverter-based high-frequency generators, which are supe
Slide 44: Efforts for S (social)
Efforts for S (social) ESG DKK has contributed to making local communities peaceful and safe through products developed with disaster measures and the environment in mind. The Company also made a working environment comfortable for employees. DKK’s activities that contribute to society We have activ
Slide 45: Efforts for G (corporate governance)
Efforts for G (corporate governance) ESG DKK introduced organizational reforms and reduced cross-held shares to help ensure transparency and soundness of operation. DKK’s activities to enhance corporate governance - We reorganized the internal organizational structure with Continued discussion of re
Slide 46: Appendix
APPENDIX = A DdKK Co. Lt
Slide 47: Breakdown of Nonconsolidated Net Sales
Breakdown of Nonconsolidated Net Sales (Millions of yen) Difference FY3/20 FY3/21 YoY change from initial FY22/3 YoY change results forecast Initial results Amount Percentage Amount Percentage forecasts Amount Percentage forecast Net sales 35,930 32,700 34,309 -1,621 -4.5% 1,602 4.9% 33,400 -909 -2.
Slide 48: Notes on Earnings Forecasts
Notes on Earnings Forecasts Figures included in this document that are related to descriptions, including plans and policies and not past facts, are forecasts regarding future earnings. They are all calculated based on management assumptions and views based on information grasped by the company at t