Slide 1: Results for Fiscal Year Ended March 31, 2022
Results for Fiscal Year Ended March 31, 2022 May 27, 2022 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. Medium-Term Business Plan Highlights 1
Slide 3: 1. Result Highlights
1. RESULT HIGHLIGHTS = A DdKK Co. Lt
Slide 4: Consolidated Net Sales
Consolidated Net Sales Consolidated net sales dropped. Net sales for Telecommunication Business dropped due to restriction or postponement of demand. Net sales for Radio Frequency Business showed signs of recovery but the increase remained small due to the semiconductor shortage. Consolidated
Slide 5: Consolidated Operating Income
Consolidated Operating Income Consolidated operating income dropped due to decreased net sales, a spike in materials and logistics costs, etc. (100 million yen) Consolidated Operating Income Operating income Operating margin Consolidated operating income 0.05 billion yen YoY change Down 1. 53 bill
Slide 6: Segment Income (Consolidated)
Segment Income (Consolidated) Profit decreased for Telecommunication Business due to a spike in materials-related costs and intensified competition to win orders. Profit rose for the Radio Frequency Business due to a recovery trend in demand, although the impact from the semiconductor shortage w
Slide 7: Overview of FY3/22 Consolidated Results
Overview of FY3/22 Consolidated Results Ordinary income fell 1.35 billion yen year-on-year as operating income decreased. Net income decreased 0.45 billion yen year-on-year. ■ Full-year statement income [consolidated] (Millions of yen) Difference from initial FY3/21 FY3/22 YoY change 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 due to improved 5G investment efficiency and as mobile carriers pushed back some base- station construction plans. For the current fiscal year, we anticipate net sales will remain largely flat with a slight decrease. Mobile Commun
Slide 10: Fixed Wireless: Net Sales (Nonconsolidated)
Fixed Wireless: Net Sales (Nonconsolidated) Net sales decreased due to extension of construction schedules affected by the impact of the COVID-19 pandemic. For the current fiscal year, we expect net sales to increase as demand from government offices is expected to gradually recover. (100 millio
Slide 11: Broadcasting: Net Sales (Nonconsolidated)
Broadcasting: Net Sales (Nonconsolidated) Net sales decreased as capital expenditure demand from broadcasters dropped, affected mainly by the COVID-19 pandemic. For the current fiscal year, we expect to achieve an increase in net sales by working to capture demand from moves to update existing t
Slide 12: Other: Net Sales (Nonconsolidated)
Other: Net Sales (Nonconsolidated) While competition to win orders remained a challenge, net sales largely stayed flat thanks to our aggressive proposition sales effort. For the current fiscal year, we expect net sales to remain largely flat as we continue to work to capture demand. (100 million
Slide 13: Radio Frequency: Net Sales (Nonconsolidated)
Radio Frequency: Net Sales (Nonconsolidated) Net sales increased, driven by recovering demand from the automotive industry. For the current fiscal year, we expect net sales to increase, although we anticipate the impact from the semiconductor shortage will be felt. Radio Frequency: Net Sales (10
Slide 14: Overview of Nonconsolidated Net Sales
Overview of Nonconsolidated Net Sales (Millions of yen) Difference from initial FY3/21 FY3/22 YoY change FY3/23 YoY change forecast Initial results Results Amount Percentage Amount Percentage Forecasts Amount Percentage forecast Net sales 34,308 33,400 27,310 -6,998 -20.4 % -6,090 -18.2 % 30,000 2,6
Slide 15: 3. Forecasts for Current Fiscal Year
3. FORECASTS FOR CURRENT FISCAL YEAR 14
Slide 16: Consolidated Net Sales and Operating Income Forecasts
Consolidated Net Sales and Operating Income Forecasts Consolidated net sales have been recovering gradually from the impact of the COVID-19 pandemic. We expect the overall net sales will increase from a year earlier. Consolidated net income is expected to increase, driven by cost-cutting activit
Slide 17: Segment Forecasts (Consolidated)
Segment Forecasts (Consolidated) We estimate both net sales and profit will increase for the Telecommunication and Radio Frequency segments. (100 million yen) Net sales (100 million yen) Segment income Telecommunication Radio Frequency Telecommunication Radio Frequency FY3/23 (F) FY3/23 (F) FY3/23
Slide 18: Overview of Consolidated FY23/3 Forecasts
Overview of Consolidated FY23/3 Forecasts (Millions of yen) FY3/22 FY3/23 YoY change results forecasts Amount Percentage Net sales 33,968 37,000 3,032 8.9 % Telecommunication 25,908 27,000 1,092 4.2 % Radio Frequency 7,959 9,900 1,941 24.4 % Operating income 53 750 697 1,312.4 % Operating margin 0.2
Slide 19: Initiatives in Mobile Communications
Mobile Initiatives in Mobile Communications Communications Promotion of radio equipment development • Work to develop widely adaptable radio equipment to increase competitiveness as a growing adoption of the O-RAN international standard, as we can expect an increase in wide- ranging customer demand.
Slide 20: Initiatives in Radio Frequency
Radio Initiatives in Radio Frequency Frequency Shift to the high-frequency induction heating method as the share of heat-treatment furnaces is large in the metal heat processing industry. Furnace heat treatment method High-frequency induction heating method Advantages Advantages • Can perform batch
Slide 21: Initiatives on Governance
Initiatives on Governance Compliance program Management’s commitment Communicate from the management layer a message, clearly and on an ongoing basis, that compliance is the most important matter and precondition for the management and the management team is committed to leading the effort to mainta
Slide 22: Shareholder Return
Shareholder Return For FY3/22, we plan a year-end payout of 60 yen per share, with DOE of 1.5% set as the lower limit. As a measure to enhance shareholder returns and improve capital efficiency, we are in the process of buying back treasury shares totaling up to 1,100,000 shares or 2.5 billion y
Slide 23: 4. Medium-Term Business Plan Highlights
4. MEDIUM-TERM BUSINESS PLAN HIGHLIGHTS 22
Slide 24: DKK-Plan2025 Established
DKK-Plan2025 Established We established a 3-year plan starting from FY3/23. Access this URL for detailed information: https://www.denkikogyo.co.jp/ir/library/pdf/plan/2022/DKK_plan2025.pdf 23
Slide 25: In Pursuit of Our Ideal
In Pursuit of Our Ideal Create new businesses and further expand existing businesses by FY3/31 to strengthen our business foundation From page 5 of Medium-Term Business Plan: DKK-Plan2025 24
Slide 26: To Realize DKK-Vision2031
To Realize DKK-Vision2031 Aim for further growth by laying a foundation for growth by FY3/25 From page 9 of Medium-Term Business Plan: DKK-Plan2025 25
Slide 27: Basic Policy and Priority Measures
Basic Policy and Priority Measures Build a solid foundation for growth, with three measures at the center From page 10 of Medium-Term Business Plan: DKK-Plan2025 26
Slide 28: Material Issues to Achieve Goals
Material Issues to Achieve Goals Promote initiatives for five material issues to achieve sustainable development and growth From page 11 of Medium-Term Business Plan: DKK-Plan2025 27
Slide 29: Numerical Targets
Numerical Targets Numerical targets set for pursuit to improve revenue base From page 12 of Medium-Term Business Plan: DKK-Plan2025 28
Slide 30: Financial Strategy
Financial Strategy Aggressive investment to lay the foundation for improved profitability From page 40 of Medium-Term Business Plan: DKK-Plan2025 29
Slide 31: Toward Strengthening Business Foundation
Toward Strengthening Business Foundation Restructure relationship of trust with all stakeholders by developing highly transparent management structure From page 14 of Medium-Term Business Plan: DKK-Plan2025 30
Slide 32: Toward Strengthening Business Foundation
Toward Strengthening Business Foundation Solidify business foundation by securing a Board of Directors structure that incentivizes Directors to promote reforms From page 16 of Medium-Term Business Plan: DKK-Plan2025 31
Slide 33: Toward Strengthening Business Foundation
Toward Strengthening Business Foundation Prioritize human resources, which form the basis for management Aim for growth and sustainability while paying attention to external environment From pages 19 and 21 of Medium-Term Business Plan: DKK-Plan2025 32
Slide 34: Business Strategy
Business Strategy Work to optimize business portfolio, with two of the five material issues as axes From page 24 of Medium-Term Business Plan: DKK-Plan2025 33
Slide 35: Business Strategy
Business Strategy Establish new segments for the purpose of business structural reforms and clear management of profit for each division From page 25 of Medium-Term Business Plan: DKK-Plan2025 34
Slide 36: Business Strategy
Business Strategy Aim for net sales of 43.0 billion yen by FY3/25, up about 25% from the level in FY3/22 From page 27 of Medium-Term Business Plan: DKK-Plan2025 35
Slide 37: Business Strategy
Business Strategy Set local 5G as the key target, develop radio technology and a solution service for customer issues, and grow it into a 5.0 billion yen business From page 29 of Medium-Term Business Plan: DKK-Plan2025 36
Slide 38: Business Strategy
Business Strategy Develop a new market by finding applications for the superheated steam technology Set it as the core business of environmental management and grow it into a 5.0 billion yen business From page 31 of Medium-Term Business Plan: DKK-Plan2025 37
Slide 39: Business Strategy
Business Strategy Work to expand our market share and improve profitability through social contribution by building social infrastructures, using the technology and trust we have developed as the basis Goal Strategy Take advantage of our antennas to expand shares, expand scope of Mobile To expand ou
Slide 40: Business Strategy
Business Strategy Expand existing businesses, beginning with drastic reforms and begin to target overseas markets, rather than just the domestic market From page 38 of Medium-Term Business Plan: DKK-Plan2025 39
Slide 41: Capital Strategy
Capital Strategy Make ROIC and WACC the key indicators to make us aware of investment impacts toward future growth and business expansion From page 43 of Medium-Term Business Plan: DKK-Plan2025 40
Slide 42: Thank you very much for your attention.
Thank you very much for your attention. 41
Slide 43: Appendix
APPENDIX = A DdKK Co. Lt
Slide 44: Operating Results Recalculated According to New Business Segmentation
Operating Results Recalculated According to New Business Segmentation (Millions of yen) FY3/22 Results Net sales 33,968 Telecommunication 25,908 Mobile Communications 13,310 Fixed Wireless 5,509 Broadcasting 2,996 New segment in Telecommunicati Solutions 128 on Business Other Businesses 3,966 Radio
Slide 45: 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